Remortgaging without an income help needed

normal

I've currently got a spare flat (my old home) which I'm renting out at the moment. I've recently taken redundancy so I could look at setting up my own business. I was wanting to borrow against the flat (it's fully paid off), but my bank said they'd not lend me any money as I've not got a job. Nor will they take a guarantee off my parents as they're pensioners (wealthy ones!)
Does anyone know of a mortgage providor who'd lend despite me not having a job and no business accounts to look at? (It'll be a start up business) I was looking to borrow less than 70% of the value of the place and can afford the repayments for the next few years out of my savings.

Thanks

beecher2

Your only option looks like selling up the flat - no-one's going to give you a mortgage with no income.

normal

I'm trying to avoid that if possible. Either through a landlord's policy or by letting my tenants leave (their contract expires if a couple of months) and as a plain remortgage. It's valuable central london location and I'm trying to keep hold of it long term as a nest egg.

JA1000

I was in this position quite a few years ago, the product I used was called a 'Bond to Let' I put up 6 months mortgage payments as a bond the money was released, interested rate was above the norm but it helped me out.

The market has killed all these products.

If you were a bank would you lend to someone who couldn't pay. It's easier for them to collect a monthly payment than to chase for repossession, are you lending to support your business. Why not use Bank of M&D?

normal

I kind of figured that I was looking to borrow about 50% of the value and so if things went wrong then the bank would get a bit of a bargain. (The place is worth a few hundred thousand). I can pay the monthly repayments for nearly 3 years, that's not a problem. I need a large lump sum to set up my planned business as it require a large outlay on equipment to start with.
Bank of M&D is a last resort. I want to do this by myself with my money/assets. Also not sure they have that kind of cash spare.

JA1000

If you are setting up a business why are you not taking out a commercial loan and put your flat up as collateral? Risky as you could lose it but it looks like you are up for the risk by doing this another way.

You need to talk to a small business adviser, my only concern is not knowing what your business is, are they likely to take the risk, with a flat as security I think they would be more interested

happybroker

you will need to put together a great business plan for this....Natwest's commercial banking website have an excellent programme you can download free of charge to help.

normal

JA1000 wrote: »

If you are setting up a business why are you not taking out a commercial loan and put your flat up as collateral? Risky as you could lose it but it looks like you are up for the risk by doing this another way.

You need to talk to a small business adviser, my only concern is not knowing what your business is, are they likely to take the risk, with a flat as security I think they would be more interested

You're right, but I'm trying to reduce my costs.
A remortgage would be at lower rate and also over a longer period of time and so monthly repayments would be significantly less. I'm trying to give myself as much wriggle room as possible to make sure the business is off to a good start and I'm not chasing my own tale just to keep up with the bank's business conditons. I fully intend to repay the debts within the first 5 years, but I want to leave a safer margin for error in my cashflow.

I think it's fair to say that most people I know who've started up their own succesful businesses have said banks were their biggest problem in the first few years. Once the businesses were succesful, then the banks were begging to help, but they made it nearly impossible to succeed in the first place.

JA1000

Dragons Den?

Might be clutching here

normal

:rotfl:

I think I'd rather borrow the money off a bank on a business loan. Knowing my luck, I'd leave the Den with none of the money and having given half the business away!

happybroker

secured commercial finance if properly sourced may not be as expensive as you think.