Mortgage without job

antrobus

HappyMJ wrote: »

... That's nice. How about we make all landlords sell their properties. Then there would be no properties to rent and the council will have to house us all....

Yes, but the properties concerned aren't going to disappear are they? They'll still be there.

holly_hobby

HappyMJ wrote: »

Probably as much value they put on my 6 month contract work. It's counted in full.

Not quite.

And not as clear cut when it comes to monies being provided under a court or formal arrangement, specifically for the care of children.

Normally allowable in the pch of a main residence, which will obviously benefit the children as their home - purchasing an investment on the strength of maintenance payments is I feel a different issue altogether.

If there are no tenants, in essence, the OP will be using monies in receipt for care of the children to pay the investment mge in addition to own residential liabilities.

(By the way - even if the OP has an acceptable (i.e all benefits & maintanance accpeted) basis of income, it needs to be circa 25k for any BTL lender (unless a protfolio landlord) , with the rental income at 125% of mge payments at circa 6%.), and at least a 15% deposit.

HappyMJ wrote: »

I would assume as the OP doesn't work then the OP doesn't pay tax so it doesn't matter.

Yes but as soon as the OPs income exceeds her personal allowance (£7,475 for 2011/12 tax yr) she is liable to tax. (at basic rate up to £35,000).

The value of any investment should always be considered against the individuals tax position - and the raising of tax situation/mitigation. to the OP is both responsible and thorough advice.

Bearing in mind the issues re income - I agree with Antro that raising finance on the residential property would be the easiest way of trying to fund the BTL pch - but not if there are any doubts as to is success, as the childrens (monetary) welfare will be affected by any error of judgement in respect to this BTL.

H

antrobus

HappyMJ wrote: »

Probably as much value they put on my 6 month contract work. It's counted in full.

If you know that for a fact then that's OK. On the other hand, 6 month contracts can be renewed, whereas maintenance does tend to come to end when the youngest child hits 18. All depends on the precise details of the settlement involved I imagine, but I'd have a thought a lender would be concerned about how a borrower was going to repay when their income source had a clear end date.

HappyMJ wrote: »

I would assume as the OP doesn't work then the OP doesn't pay tax so it doesn't matter.

Well they might not pay tax now. Whether or not they have to be tax when they're in receipt of a wodge of rental income is another thing all together.

HappyMJ

holly_hobby wrote: »

Not as clear cut when it comes to monies being provided under a court or formal arrangement, specifically for the care of children.

Normally allowable in the pch of a main residence, which will obviously benefit the children as their home - purchasing an investment on the strength of maintenance payments is I feel a different issue altogether.

If there are no tenants, in essence, the OP will be using monies in receipt for care of the children to pay the investment mge in addition to own residential liabilities.

How I read it is that she is buying a house to move into so that's a residential mortgage on the new house, it's not an investment property. The income from the property she lives in now that will be rented out will be used in the income calculation for the new mortgage.


Everyone is liable for tax, however you benefit for tax relief if your annual income is less than your personal allowance (£7,475 for 2011/12 tax yr).£620 per month profit per month. That quite a lot of profit from 1 property.

So if the OPs annual taxable income exceeds her PA (up to £35,000) - she is liable to basic rate tax.

The value of any investment should always be considered against the individuals tax position - and the raising of tax situation/mitigation. to the OP is both responsible and thorough advice.

H

Yes it is and almost everyone so far has been saying zero chance of mortgage on no income from a "job" which isn't true.

holly_hobby

How I read it is that she is buying a house to move into so that's a residential mortgage on the new house, it's not an investment property. The income from the property she lives in now that will be rented out will be used in the income calculation for the new mortgage.

Yes - but the OP is seeking a new res mge because she wants to turn the current main residence & the childrens home, into a business i.e she wants to rent it out, and thats why she is seeking a further mge to re-home herself and her children.

Regardless, it doesn't change the mathematics - if no tenant - the mge repayment monies have to come from somewhere - which will affect her ability to repay the res mge which is supported in its entirety by unearned income in the form of benefits/maintenance in respect of her childrens care. Any lender will assess her res application on this basis, unless she can get a let to buy mge provider, who will accept the support of her res mge with them on the stated sources of income.

Seeking a res mge will be easier (re the 25k issue) than sourcing a BTL - but is peppered with probs due to the OPs sources of income (i.e unearned and for the benefit of issue)

Yes it is a lot of potential profit - who's to say it won't be achieved ? ( or that she won't or does not have other investment income, or at some point in the future enter the workplace, all increasing her income further)

Assuming for lots of reasons is dangerous, and regardless of whether she will exceed the personal allowance or not, to tell someone they will not be liable to tax, simply on the basis that they "don't work", is fundamentally flawed, and without having the full facts, both wrong and irresponsible. (should of course the OP take the poster at their word). Its safer to say that she may not be liable to income tax on the rental income, depending on her financial circumstances, not that she won't - it gives the wrong message.

Zero chance of a 2nd mge on no income, is I think you'll find generally quite an accurate assessment of the situ.

I would suggest that the OP seek the advice of a whole of market broker, whom will assess the possability and/or best way to acheive the OPs desire.

H

purplelila-2007

Owain_Moneysaver wrote: »

They do however increase the pool of available homes to tenants

Yes it does , however it pushes up prices for BUYERS and those tenants who had they been born in their parents generation would have been able to afford to buy , have been left with no choice but to rent and pay someone elses mortgage .

And people wonder why my generation feels so disenfranchised !!:mad:

purplelila-2007

Lets be realistic here , the chances of recieving a mortgage without a monthly income coming in is slim in todays economic climate ,even though OP already has a house fully paid for .

A LOT of banks don't consider benefits as income and quite rightly so .

If OP does want to buy another house , why not get a job and show a monthly salary coming in , plus the house already owned as security? To a lender that would be a more viable situation .