Not working, need small mortgage

bundly

Can any of you brilliant and experienced people help?

Here's me: 51, single, not working, am registered as self employed but my company brings in peanuts, under £2,000 a year. I rent a room under the RAR scheme and get £80 pw from that.

I own a house worth £200,000, with no mortgage (paid it off 3 yrs ago) and I have no debts, no CCJs and no bankruptcy.

I want to borrow £20k against my house. I intend to put this with the £60k I have in savings and buy a one-bedroom buy-to-let flat. The whole of income from the flat, about £400 a month, I will use to repay the mortgage, hopefully it will be repaid in 2 years.

I just phoned the BS that has my £60k and they refused to lend me the £20k on the grounds that, as I am not working, I cannot prove I can repay the £25pw.

Am I going to be refused by every lender? Or is it just the silly Nationwide?
Is there a special lender I should go to?
What interest rate will I have to pay to get a non-status mortgage?
Would it be any different if I borrowed against the new property instead of my home?
Should I get a 2-year bank loan instead?

I did post a similar question about my current plans elsewhere, and all but one person who responded said DO NOT DO IT.

Thanking you in advance.

Bundly

Alan_Cross

bundly wrote: »

Can any of you brilliant and experienced people help?

Here's me: 51, single, not working, am registered as self employed but my company brings in peanuts, under £2,000 a year. I rent a room under the RAR scheme and get £80 pw from that.

I own a house worth £200,000, with no mortgage (paid it off 3 yrs ago) and I have no debts, no CCJs and no bankruptcy.

I want to borrow £20k against my house. I intend to put this with the £60k I have in savings and buy a one-bedroom buy-to-let flat. The whole of income from the flat, about £400 a month, I will use to repay the mortgage, hopefully it will be repaid in 2 years.

I just phoned the BS that has my £60k and they refused to lend me the £20k on the grounds that, as I am not working, I cannot prove I can repay the £25pw.

Am I going to be refused by every lender? Or is it just the silly Nationwide?
Is there a special lender I should go to?
What interest rate will I have to pay to get a non-status mortgage?
Would it be any different if I borrowed against the new property instead of my home?
Should I get a 2-year bank loan instead?

I did post a similar question about my current plans elsewhere, and all but one person who responded said DO NOT DO IT.

Thanking you in advance.

Bundly

These lenders are getting totally and pathetically laughable in their inflexibility. Yours is a good case point showing up the current lack of competition for what it is.

£280k of equity and only asking for £20k on an investment which would bring in nearly £4kpa gross. What the hell kind of 'sub prime exposure is that', for God's sake?

For starters you should get onto the BS again and threaten immediate withdrawal of your funds. Then ask your bank how much a £20k overdraft might cost. Then approach a whole of market broker and see what they say. If the worst comes to the worst you could take out 10 £2k loans and give two fingers to the 'lending industry'. I know this would cost more but you'd still be quids in.

bundly

Thank you Alan.

The way I see it, there is no way I am (or any sane person it) going to risk losing my £200,000 home by not repaying a mere £25 pw mortgage repayments. My house has four bedrooms, I can easily get £70pw for each of the three I am not using. I only let one currently and each time it comes empty I stick it in the local paper and get at least a dozen applications.

Thank you for the advice.

"you should get onto the BS again and threaten immediate withdrawal of your funds" --- but I will be withdrawing all £60 to buy the flat, anyway.

"Then ask your bank how much a £20k overdraft might cost." --- My current account is with them, too.

My biggest hurdle before doing any of that is that just about everyone except you is warning me not to do this at all!