Can I get a mortgage if I'm not working

zzzLazyDaisy

Buy the new house for cash, and let it out. Use the rent to supplement your income, replacing the income you have lost from your savings. Continue to live in the current house until you sell it, and at that point end the tenancy on the new house and move in.

grey_gym_sock

not sure if i have this right, but ... you own and live in your current house, and you want to buy a new house and move into it, and then sell your first house within 2 years, at which point you would be mortgage-free?

*if* that was all correct, then why not try to sell your current house and buy the new house at the same time (i.e. form a chain, like most movers do), allowing you to buy the new house as a cash buyer? any other way of doing it will cost more.

(you may have a good answer to that. you don't have to tell us what it is. you do need to be clear in your own mind what your reasons are.)

a bridging loan (if anybody will give you one with no income - i don't know for sure) would be another way, but they are expensive (as mortgages go). you might lose less money by asking less for your current house to make it sell more quickly.

holly_hobby

Ok - well you can't self certifiy income that you don't have.

It appears that you will be paying your new mortgage from capital in a feeder account, and by the time that runs out you hope to hav sold your other property.

The issue from a lenders point of view, is that they are unable to ringfence that capital for the servcing of the mortgage - which means that you may at any time reduce or completely exhaust the available capital effectively paying the mortgage.

So you can see where the issue lies.

A suggestion could be to speak to your own bank (or an investment bank), and if there is a low LTV, to see if the arrangement could be effected on a fixed rate for the reqd term, with the equivilent feeder capital placed into a feeder account held in trust (which effectively removes it from your ownership) - and may be a way to deal with your current income issues.

What I would like to make clear at this point, is that any suggestion of a effecting a buy to let mortgage to effectively "get round" the earned income issues, has serious issues and possible consequences to be digested.

In that as you have no intention of letting the propety to be purchased at outset, but for it to be your primary residence, any application under this guise would essentially constitue mortgage fraud (presuming you actually find a broker willing facilitate the application if they know the true facts). This is apart from the fact the the lender will want evidence of an AST, that the estimated rent will support the loan, and even evidence that the letting is being marketed and mangated by an ARLA letting agt.

This will result in taking the mortgage from unregulated to regulated lending (which most BTL lenders are not licencsed for) and obviously a breach of mortgage terms & conditions.

Which essentially means that if the lender becomes aware of this set up (before you are in a position to redeem it by sale of your planned sale of prop no 1), they will immediately switch the mge to residential lending - catch is you have no earned income to support it, or they will request immediate redemption (repayment) of the mortgage without giving the option to switch to a residential mortgage, but you will have no earned income to support a resi mortgage with any other lender.

Should this happen, your plan to sell prop no 1 may come a little sooner than you wish with fingers crossed you will have the funds to wholly redeem the BTL mge - otherwise its that property you will have to sell instead.

The lender will also register the event on the national register, and have the right to pursue prosecution through the courts, should they see fit (unusual but it can and does happen).

So you can see how serious the ramifications a "little white lie" may result in ...

To be honest, using a BTL mortgage as a back door to self cert is as old as the hills and nothing new, but lenders are now much more savvy to it, make more ad hoc checks, and take breaches and explotation of the arrangement very seriously - with any professional adviser found to be complicient in facilitating/suggesting such an arrangement, equally party to the event and subject to standard industry/legal proceedings too - so finding a broker to help you may prove difficult, unless of course they are dodgy and desperate, or you choose to conceal the true facts of the application from them.

Despite all of the above, if you feel comfortable in trying this route at least you are now fully aware of the possible consequences, and there won't be any surprises if the lender does come calling ....

Hope this helps

Holly

mm707

Holly, that was very informative and interesting.

Thank you

mm707

Been to see a mortgage advisor and it appears I can get a 'let to buy' mortgage of up to 70% value of my current house regardless of having no income as the rental income would easily pay the mortgage. This would allow me to buy the other house.

holly_hobby

Hope this correct for you, as from my experience when placing, there had to be a history of historical letting of the property with accounts/HMRC to validate the actual income being generated for it to be utilised as income (as oppossed to an estimate of what may be achieved).

However, I do know that Nationwide will look at a portion of rental income from an unencumbered property - if this is the lender in mind you need to make sure that the amount of rental use for affordability, is sufficient to support the reqd borrowings.

To that end I would make sure that your broker discusses the case directly with the underwriter and obtains an AIP - before you dive in and start incurring any fees.

Very best of luck and enjoy your new home !!

Hope this helps

Holly x