Re-mortgage question

purepink

Please can someone help me?

I am self-employed and my income isn't very big. When my partner left, 5 years ago, I moved out of a rented office and based my business at home. The house was perfect for me, the children and the business. I work long hours - sometimes I see clients until 8pm (they come to my house) but the house is laid-out in such a way, that the children still have access to the kitchen and a small 'family room'.

To enable me to keep the house, a friend lent me £125,000 He is not named on the deeds. We created a 'contact' between us and we agreed a 5-year term, which has just ended. I thought that I would be in a position to 'downsize' then, because my eldest children would be in Uni. I have looked at downsizing, but the children are still with me and I cannot find a property which will work for both the business and 'home' life. I also really like my property and would much prefer to stay there. My friend needs his money back to repay his own (very, very low rate 'interest only' mortgage). It expires in 18 months, so I have agreed that if I can't find another solution, I will put my house on the market in 12 months time. I should add that this is a joint agreement and he is also happy with it.

So, I've started looking. Ideally I would like to borrow £149,000 but can only borrow around £70,000 based on my income. The house is valued at £275/280,000 and I currently have a mortgage of £24,000

Please does anyone know of a mortgage provider, who would allow me to borrow against the high equity held in the property? I am the 'sole owner' of the property. I can afford repayments on this amount, on an 'interest only' mortgage. Thank you.

beecher2

No, you can't borrow on the equity - you need an income sufficient for a £149,000 mortgage. Much as you may prefer to stay in your present house, it isn't realistic. You need to look for a house under £200k and maybe lower your expectations somewhat.

Wh05apk

Or bite the bullet and get an employed job earning about £30k if possible?

ACG

Sorry to say it but you have no chance.
Its done on affordability, your looking at about 4 times your income but they take into account any other loans, debts etc so that could be revised downwards.

Rather than looking for a lender your best bet might be to look for a property you can afford and would be suited for your needs.

Meeper

I would like a friend like yours.

purepink

Meeper wrote: »

I would like a friend like yours.

I know - I count my blessings every day!! And have done for the last 5 years. I helped him, in the past... I guess that's what friendship is really about, isn't it?

purepink

Thank you all, for your swift responses. I think the best thing I can do, is increase my income over the next 12 months.... which is possible. I have been poorly for the past 5 years and although I continued to work, it did affect my earning potential. I was finally diagnosed a few months ago and I'm now on medication, so I should be able to increase my income again.
I spent months looking for a smaller property earlier this year, but just couldn't find one to accommodate all of us, plus the business. That's not to say that there won't be one out there though and I will continue to look.
Thanks again...