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Mortgage for Home Improvements but unemployed?

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Hi,

I own a property outright with no mortgage and it is probably worth between £200-240k. I want to do a conversion to increase value in both rental and sales terms. Initially, after the conversion I will be renting it out so that extra income from the conversion should, in theory, cover most of the mortgage repayments.

The problem is I am unemployed, will I be able to get a mortgage to release about £30-35k from the property for the conversion?

If not, what are my options?

Thanks
«1

Comments

  • anh1904
    anh1904 Posts: 480 Forumite
    I think the days of self-certification are long gone. I am not a mortgage broker, but even with a very low LTV, I suspect you will find it difficult to secure a mortgage of any level without some sort of proof of income.
    Like all revolutions, guerrilla goodness begins slowly, with a single act. Let it be yours.

    Practice random acts of kindness and senseless acts of beauty.
  • beecher2
    beecher2 Posts: 3,677 Forumite
    Tenth Anniversary 1,000 Posts Combo Breaker
    No, you'd need an income to get any sort of mortgage.
  • anh1904
    anh1904 Posts: 480 Forumite
    You may be able to get somewhere if you have a guarantor ... but even then, with no income that you can prove, I suspect you are in for short shrift.
    Like all revolutions, guerrilla goodness begins slowly, with a single act. Let it be yours.

    Practice random acts of kindness and senseless acts of beauty.
  • JohnDoe1
    JohnDoe1 Posts: 89 Forumite
    The income would be the rent money.

    I would be renting from somewhere else a lot cheaper.

    Would that not work?
  • anh1904
    anh1904 Posts: 480 Forumite
    Think you will need to find a very accommodating buy to let landlord.
    What about periods when the property is vacant?
    Landlords expenses?

    I think you would need to do a full cashflow projection to satisfy yourself that it is possible.
    Like all revolutions, guerrilla goodness begins slowly, with a single act. Let it be yours.

    Practice random acts of kindness and senseless acts of beauty.
  • ViolaLass
    ViolaLass Posts: 5,764 Forumite
    JohnDoe1 wrote: »
    The income would be the rent money.

    I would be renting from somewhere else a lot cheaper.

    Would that not work?

    But you won't have the rent money until the work has been done and the place has been let. What if you don't get a tenant? What if the work overruns? How will you pay the loan while the work is being done?
  • JohnDoe1
    JohnDoe1 Posts: 89 Forumite
    The loan/mortgage would cover all the building work and I will have about £10k in savings to cover the unexpected ...
  • anh1904
    anh1904 Posts: 480 Forumite
    You need to consult with a specialist - your request is "anything but" mainstream, so talk to a specialist Buy to Let broker who can advise what you can, as well as what you might, get away with.
    Like all revolutions, guerrilla goodness begins slowly, with a single act. Let it be yours.

    Practice random acts of kindness and senseless acts of beauty.
  • GMS
    GMS Posts: 5,388 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    To do a Buy to Let the proeprty would need to be suitable for letting and provide a rental income of the mortgage payment plus 25% as a minimum.

    Most Buy to Let lenders want a minimum earned income of around 25k so you would not be eligible. Other issue would be if you are a first time landlord. This would exclude many lenders.

    Potential rent will not be enough to raise further finance on the property.

    Very slight possibility of getting a bridging loan to do the works but you are then faced with the difficulty of getting out of it after the works, with bridging being expensive and short term. The risk involved to you would be huge.

    What works need to be done and what kind of rental are you expecting?

    Are you able to get/looking for a job?
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • JohnDoe1
    JohnDoe1 Posts: 89 Forumite
    GMS wrote: »
    To do a Buy to Let the proeprty would need to be suitable for letting and provide a rental income of the mortgage payment plus 25% as a minimum.

    Most Buy to Let lenders want a minimum earned income of around 25k so you would not be eligible. Other issue would be if you are a first time landlord. This would exclude many lenders.

    Potential rent will not be enough to raise further finance on the property.

    Very slight possibility of getting a bridging loan to do the works but you are then faced with the difficulty of getting out of it after the works, with bridging being expensive and short term. The risk involved to you would be huge.

    What works need to be done and what kind of rental are you expecting?

    Are you able to get/looking for a job?

    It's a loft conversion to provide extra room or 2 increasing space by about 60%. Rental income would be, I would guess, about £1300-£1400 pcm. However, I would be renting elsewhere at about £400pcm which would leave a net of £900 pcm which would still easily cover the mortgage/loan (at reasonable rates).

    Currently not looking for a job.
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