Can I remortgage without permanent employment ???

worldweb

Bit of a strange situation but i was recently selling my house to fund a round the world trip, house was due for completion in next 2 weeks, but the buyer has pulled out leaving me a bit stuffed, as I now dont have permanent employment only short term contract work. Put the house back on the market but rather than waiting for a sale does anyone know if it would be possible to remortgage to raise the funds even though i don't have permanent employment?? The house is worth £215k and the remaining mortage is £100k. Idea is to rent the house out while I'm away but even this isn't a guaranteed income stream. Not really sure if this is possible or not?

danjberry

you can remortgage it as a buy to let if you intend to let the property and you will be able to raise the mortgage to fund your trip. i would speak to a mortgage broker in your area to come up with the best deal for your needs and enquire to how much rent your property can make to make sure this covers the mortgage payments (most lenders need the rent to be 125% of the mortgage payment.)

herbiesjp

Indeed.

Re-mortgage on to a BTL mortgage, and increase the £100k by what amount you need to fund the trip.

However the rental income you would expect to receive would need to be sufficient to cover the mortgage payments.

How much extra would you need to borrow?
How much do you think you would be able to let the property out for?

How long do you think you will be away for?

worldweb

Thanks for that. I think i'd need to borrow £30k, but i was considering more so there is money to cover the mortgage payments in case the rental income doesn't come through. Currently paying £600 for the mortgage so was looking for about the same amount if not a little more in rental income which i think is reasonable. Plan is to go travelling for 12-18 months and then sell the house on my return but my big worry with this is the ability to remortgage when they know my only income (the house rental) is not guaranteed.

soldier_sam

worldweb wrote:

Thanks for that. I think i'd need to borrow £30k, but i was considering more so there is money to cover the mortgage payments in case the rental income doesn't come through. Currently paying £600 for the mortgage so was looking for about the same amount if not a little more in rental income which i think is reasonable. Plan is to go travelling for 12-18 months and then sell the house on my return but my big worry with this is the ability to remortgage when they know my only income (the house rental) is not guaranteed.

Where is your house?? (I don't want full details, not going to burgle you or anything!) I'm looking to rent, and I'm sure lots more moneysavers on this site are to... Location would do. Thanks

herbiesjp

worldweb wrote:

my big worry with this is the ability to remortgage when they know my only income (the house rental) is not guaranteed.

Are you worried that the lenders will not agree the mortgage because the rental income is not guaranteed?

If so, don't worry in terms of will the lender mind if the income is not guaranteed. This is exactly how BTLs work... it is based on anticipated monthly rental income.

I would be more worried on a personal level (rather than will a lender be worried), that there are not any void periods and what contingenvy plan I have in place should the flat be empty.

Please remember that a BTL mortgage amount is agreed on the basis of the expected monthly rental income and each lender's calculation of this is different.

So you need to make sure you can find a lender that will agree the mortgage for you, based on the figures you have. I owuld suggest appraoching a few lettings agents, and getting them to give you a rental appraisal. Then you can use the average figure for your purposes.

HTH