Second charge on my property could affect me borrowing more on my mortgage.

getmore4less

bargainbarmy wrote: »

Hi I have a second charge against my house for a business loan I have with Natwest for a property business (ltd company) run as a sideline with my sister. We both have other day jobs and set up the business a few years ago with a £150K loan which is now £112K and paid off in 6 years. The loan is £1500 per month but is completely covered by the income into the business so we do not have to pay anything out of our own money at all.

The problem is I want to borrow a further £30K on my own mortgage to build an extension. The advisor from Nationwide asked me if I had any other charges against my property and I told her about this second charge. she said she would have to refer my application to the underwriters as she wasn't sure they would offer me the loan because of the second charge and the amount of the £1500 payment per month. I told her that the sideline business was self funding etc.
My LTV on my own house is about 25% (outstanding mortgage £127k with £90K paid off in 4 years time, property value £500K in current market) so as far as risk goes I'm pretty safe but it's just this second charge that is worrying me and I'm wondering if Nationwide come back and refuse me would I have the same problem with other lenders? Does the fact that the business is a ltd company help us at all? I'm thinking that they may take into account the £1500 per month loan cost as part of my personal outgoings. My job salary is £42K.

Any advice would be greatly appreciated.

So you are going to be generating {(112/6 + 90/4)/12} £3.4K a month on average to pay off these debts, delay the extension and save for it.

redirect all the payment to your extension and reducing the business loan keep the residential mortgage as high as you can, acheves the same goal in the end just takes longer to build the extension

bargainbarmy

jitsuka wrote: »

Buy To Lose - love it.

This guy is over-stretched. I hope you fold.

I seem to have created alot of interest from my thread. Yeah maybe I was wrong about the market crashing but prices are only at most 20% lower than 2007. In my area prices are 10% lower. I was still correct about the market not dropping 50%, but people may be right it could drop further but I personally doubt it would ever go to 50%.

However, I am not overstretching myself. I have a very good income, as does my wife. Our mortgage outgoings are about 20% of our income and we continue to overpay as rates are low. Likewise with our BTL business....yes.... our property values have dropped since 2007 but all the properties were bought between 1999 and 2001 so values are still much higher than what we paid. Our mortgages are relatively small and we pay off lumps sums when we can to reduce any amounts owing. It is all immaterial at the moment anyway as we are in this for the long term and the BTL business was purely set up with that in mind as a savings vehicle for retirement.

All I was asking for was some advice. My God I'm half expecting some of you to be going through my bins to see what else you can dig up and post on MSE and HPC. It's pretty weird for some people to take the time and go through every post that somebody has ever posted just to dig some dirt.
You are all pretty sad people and I am guessing none of you have ever taken the smallest amount of risk in your pathetic little lives. I have never defaulted on any credit or mortgage payment ever and my credit rating is excellent. I am not smug and I am not boasting. Yes there are people that take borrowing to the limit but I am not one of them unless I know I can repay it.

orangina

BB

It is the lenders who decide if they consider you overstretched, irrespective of what you think.

Todays appetite for risk is very low and you need to adjust your expectations.

getmore4less

If the business is now succesfully generating income and has assets can it not borrow without using you house as colateral.

Borrow within the business as much as you can and remortgage to pay off the rest of the charge and raise the extra money.

FantomX

Anyone else been PM'd by BarmyBargain? I just got this below??? Reads like someone on the edge if I'm honest:

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bargainbarmy
Today, 1:34 PM MoneySaving Stalwart


Join Date: Oct 2006
Posts: 252
Thanked 149 Times in 61 Posts


Loser
Quote:
Originally Posted by FantomX
Wonders will never cease...the coming together of TWO Buy To Lose speculators!

Congrats to you Sibley...happy for ya!

:rotfl:

Don't suppose you've ever made much of yourself. You seem to spend alot of time staying up going on forums and commenting on people's posts....may be you should get yourself some friends so you don't have to be such a loser on here.
Come back to me when you've got somewhere in your life!!!

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Charming!

bargainbarmy

getmore4less wrote: »

If the business is now succesfully generating income and has assets can it not borrow without using you house as colateral.

Borrow within the business as much as you can and remortgage to pay off the rest of the charge and raise the extra money.

Thanks for your advice.

Nationwide have rung today and said the second charge and £112K business loan is not a problem as long as I can show them it is self financing. Business account bank statements will do this. They have agreed to my request for extra borrowing.

bargainbarmy

No not sent anybody else one mate, it's only you that seems to have the time on your hands to start setting up sad posts like you do!!!

FantomX

bargainbarmy wrote: »

No not sent anybody else one mate, it's only you that seems to have the time on your hands to start setting up sad posts like you do!!!

I am chuffed that we're still mates

bargainbarmy

FantomX wrote: »

I am chuffed that we're still mates

Yeah course we are. If you ever need any help or advice just let me know. Free survey maybe when you decide to get on the property ladder.:kisses3:

FantomX

bargainbarmy wrote: »

Yeah course we are. If you ever need any help or advice just let me know. Free survey maybe when you decide to get on the property ladder.:kisses3:

LOL! :beer: