Increase mortgage to buy narrowboat?

John_H_2

Hi everyone

I'm looking to raise around £25k to purchase a residential narrowboat (+£15k savings). Posting here is the very first thing I've done, as I'd love some advice before speaking to anyone out just to sell me something, I've found mortgage companies particularly bad for this in the past - so forgive me if I sound really lacking in knowledge about mortgages!!

Basically, I and my partner own a house now valued at around £120K, we paid £63k for it 8 years ago and have always had an interest-only mortgage from Santander, so the mortgage is still at £63k. We would like to raise the mortgage to £88k to raise enough money to buy the narrowboat, rent out the house and live full time on the boat. My partner is currently a student so no income, and I'm on £40k. We both have clear credit records.

I don't need any advice about boats or living on them, but the advice I'm after is what is the best way of raising the money considering our circumstances. Can you raise money on an existing mortgage, or does it have to be a remortgage? Would my partners current position make a big difference - could I use just my income? Would we have to go through the whole rigmarole of proving our existence again? (I remember getting the original mortgage was such a headache.) Finally, do mortgage companies actually check your income with your employer? (That last question isn't for as dodgy a reason as it sounds!)

Thanks for any help, sorry again if I sound dumb re: mortgages!

:beer:

John

GuidoT

You can equity raise on your existing mortgage, without needing to re-mortgage, this can be reasonably straightforward.

You will need to give a reason why you want the funds, banks like to hear that it is for renovation of your property rather than say going on holiday.

I certainly would not tell them you plan on moving out and letting out your house just yet.

Speak with your existing lender and see if they can help.

Of course you can switch lenders and re-mortgage, but as you know it involves plenty of paperwork and you will need to provide proof of income and they may well check it. The days of self certification mortgages are over.

You income multiplies stack up but your potential new LTV may create problems for you.

Thrugelmir

You may at the very least have to be prepared to change your mortgage onto a repayment basis or have a repayment vehicle in place.

Senior_Paper_Monitor

If raising the cash on the house it will inevitably have to become buy-to-let (rather than permission to let) - which in turn may solve the immediate issue about a compulsory repayment vehicle (but you still need to plan for the future when the canal boat becomes unsuitable due to age - proobably yours rather than the boat's).

An additional problem is that unless you have formal residential mooring address - council tax etc (and in many cases even then), lenders are highly suspicious of 'no fixed abode waterborne gypsies'. Another option is to 'move in with family' but spend a lot of time holidaying on your boat !

If you get a chance to do it I envy you (as a life time fan of canal boats and the way of life - although my dream is a broadbeam, to match my girth!) BUT - and I have no idea of your 'canal experience' - make sure you can cope with life in the long term in a 35 ft x 8ft tin box first. I am assuming the length from the budget as a £1,000 per ft guidline is about right for a decent boat - but a couple of weeks holiday is very different from living on board.

John_H_2

Thanks guys, some really helpful information :beer:

Turning it to a repayment mortgage would be fine, the house wouldn't be immediately up for rent, will probably do some work on it for six months or so after moving out, will consider options then, may even decide to sell up.

SPM - cheers for the boat advice, but have that pretty much sussed. I'm already a narrowboat owner - and wanting to live aboard for the experience rather than the whole "cheap living" myth - just 'upsizing' to 60ft+, will be buying a slightly older boat to do up, as I have in the past, £35-£40k will get you a good solid second hand boat if you do your research, albeit one needing a bit of TLC. The £1000 per foot guideline is for a new build boat, beyond my budget as wouldn't consider living on anything less than 60ft.

Thanks again.

J

somethingcorporate

What were your current plans for repaying your mortgage?

Do you have an endowment or repayment vehicle in place? This may influence your decision as to how you want to finance your purchase.