RBS - need two years account for extra borrowing

[Deleted User]

Current outstanding mortgage is £125K, house is worth £230K.

RBS wont lend me £10K as extra borrowing because I dont have 2 years accounts to provide. (I'm an IT contractor).

Pretty short-sighted since I guess if I was a permie on £30K they'd be happy. Even though I could be made redundant tomorrow with zero comeback (been there done that several times!).

Best thing is an IT contractor mortgage specialist said I could borrow £310K based on my contract rate.....

Any suggestions?

I dont want to remortgage because I;m on a great rate of BR+1.1%.

Is it even possible to get extra borrowing from another lender for the 10K at a half decent rate or does it need to be with same lender?

Dave_Ham

Unfortunately this will be rock or hard place..

Your mortgage is your first charge on the property and therefore you were correct to approach them first.

As unfortunately they will not lend, it will be incredibly easy to get a 2nd charge mortgage but at considerably higher rates.

To remortgage and take a better rate and the £10k will not be cost effective as 90% of the mortgage is on your existing superb rate currently and therefore would overall increase the cost of borrowing vs option 1 (taking a second charge)

Sorry I could not offer better news, but I think you assumed as much.

ILW

Why have you no accounts?

[Deleted User]

Dave_Ham wrote: »

Unfortunately this will be rock or hard place..

Your mortgage is your first charge on the property and therefore you were correct to approach them first.

As unfortunately they will not lend, it will be incredibly easy to get a 2nd charge mortgage but at considerably higher rates.

To remortgage and take a better rate and the £10k will not be cost effective as 90% of the mortgage is on your existing superb rate currently and therefore would overall increase the cost of borrowing vs option 1 (taking a second charge)

Sorry I could not offer better news, but I think you assumed as much.

Do you mean remortgage the whole lot? Like you said, its not going to be the best option because I'd lose the good rate.

So I guess I cant leave the mortgage with current and get the £10K with someone else? Or doesnt it work like that?

[Deleted User]

ILW wrote: »

Why have you no accounts?

I do but only a years worth. Weird thing is my income is more than 2x what it was when I was permie :-(

Never had a problem with things like mortgages and loans then and was made redundant 4 times in 10 years. As I found out, if your employed less than 2 years, an employer can get rid of you pretty much at will with minimal payment.

But, of course, mortgage companies dont seem to consider this :-(

Dave_Ham

Hi there,

I feel your pain and empathise although these are different times now..

I did not make myself clear in the earlier thread.

You will get a second mortgage easily, the issue will be the rate. Your current bank retain first charge and this new secured loan or mortgage will be 2nd charge and therefore does not hold the priority charge 1 has. This will reflect in the borrowing costs as this option for £10k which be a an inflated interest rate. To the point you may be getting it unsecured...

So yes, you can get a 2nd mortgage but no - not at sensible rates..

Sorry

[Deleted User]

Funny thing is went to a contractor specialist web site and they reckon they'd lend me £450K based on my contract rate! So new lender offers £450K, existing lender with tons of history says no to £7.5K.

Thing is I could save this amount - its not far off a months income anyway, its just that I'm doing the right thing (as a contract worker) and putting money away for savings and dont want to dig into this.

Makes you wonder sometimes whether its worth just spending the lot and claiming benefits when you need to....

dimbo61

It is often said on this website that you need 3/6 months of income in cash ISA,s as emergeency savings
As someone who is self employed then you may well need 6/12 months of savings to cover perioda when things are slow at work.
Quite simple really NO WORK NO PAY
You need to build up savings and it you can afford then overpay the mortgage as this also gives you options ( mortgage holidays, reduction in mortgage payment if needed)

blacksta

It Contractor - you guys make 10k a month

ACG

A lot of lenders require 3 years accounts which admittedly doesnt help you.

You could probably get a loan for the £10k but you would need to do the sums to see if its worth actually doing.

Would they be prepared to accept 1 years with a projection off a chartered accountant?

If not then i dont think there will be a lot you can do until you get the 2 years accounts....unless your prepared to take out a higher rate loan for the extra £10k or remortgage the full amount.