Mortgage help needed, switching career following divorce...

strettsville

Hello everyone,
I wondered if someone might be help me with a problem I'm facing.

I'm 28, a qualified accountant. I'm currently unemployed, through choice as I left my job to work on a house that my wife and I bought in November 2011. Prior to leaving I had a salary of £32k and my wife had a salary of £22k, we put down a deposit of £29k.

Our current mortgage is a 2% discount from SVR from Norwich and Peterborough, it expires in November 2013.

The problem I am facing is that my wife has unfortuatley recently left, leaving me to pay for the house on my own. This is compounded by the fact that I have decided to leave my job to move to a career in teaching, which is likely to provide a salary of £22k.

I have debts of around £8k in addition to the mortgage, as was required to finish the house.

In terms of the house, I now have one lodger and will shortly have a second giving me a monthly rental income of £700pcm.

Additionally my parents have agreed to act as guarantor on the mortgage (if such a thing exists) and even have their names on the mortgage. They are not living in the home however. I am will continue to.

I also have another ad hoc income from a series of websites that I own, giving an income of around £6k per year. Not guaranteed though.

My question is, will I be able to secure a remortgage on the property if I have rental income of £700pcm, a salary of £22k (plus additional £6k) and the financial safety net of my parents?

I'm happy to answer any questions and would be over the moon if anyone can provide assistance.

Stretts

GlamGirlie

Hi

The £6K will probably be discounted as it isn't guaranteed.

Bear in mind you will need to pay income tax on the rental monies if it exceeds a certain amount (c.£4k from memory but do check).

If you parents act as guarantor (yes, they still can, at certain banks) then your gross income would be £22k + £8,400 (rent) = £30,400.

This is a net monthly amount of £1,933 (source: http://www.thesalarycalculator.co.uk/salary.php).

The bank I worked at allows you to have 60% of your net monthly income as committed outgoings, i.e. rent/mortgage, council tax, utility bills, loans & credit cards, child suppport paymetns etc.

Gym, food, petrol, entertainment etc are to come from the remaining 40%.

60% of your income therefore would be £ 1,159.80 per month for committed outgoings.

This should give you an idea if it's affordable or not, as you know how much your mortgage payments are - but didn't state them on your post.

If your parents are joining you on the mortgage, then their incomes (and outgoings) will be taken into account. You do not mention their ages though - bear in mind most mortgage co's wont lend beyond age 65 or 70 - so if your mortgage would take them past this, it would probably be declined.

kingstreet

You don't make clear why you need a remortgage and if you plan to see out the current deal in November next year, or if you plan to pay any early repayment penalty?