Newbie - In a bit of a mess !

davemal

Hi,
I wonder if anyone would be good enough to give me some advice?

I am self employed with a net wage of £7500 p.a

My mother passed away and left a £90,000 house to me and my brother.
Currently, I am buying his share of £45,000 out.

So far I have paid him £35,000, on a monthly basis from my salary.
To do this, I have used a car loan of £4000, a business visa card of £1500, & a personal visa card of £2500.

My brother has received £35,000 from me, but I owe a total of £8,000 (from above)

The house has had subsidence but a recent structural engineer's report
states it has stopped, but it will need underpinning.

A mortgage person has been round, 3 years ago,
and reported that the house was ok for a mortgage
subject to the underpinning & some pointing (a total of £5,000 to fix the both)

To get it underpinned & pointed , I would have to max out my cards to raise the exta £5000.
After that I could apply for home insurance,
which would be required for any mortgage application.

The total of maxing out my cards and the car loan would come to £13000
& I still owe my brother £10,000 , which equals a total of £23,000 owed.

I hope this £23,000 is just inside the 3 and a half times my annual salary of £7500
which would enable me to pay off my credit cards, car loan & have the house signed over.

Any ideas, comments, or any corrections would be very appreciated.

ps Is it Halifax or Yorkshire or ANother which do a high times rate for 70% plus mortgages?

Cheers
Dave

Dave_Ham

Dave - see a decent broker and make this problem go away.

There are solutions, but there are way too many variables and would be irresponsible of me or anyone else to say try this bank based upon limited information.

Broadly speaking the property needs to be suitable security for a bank to lend to you on any terms. The valuation is undertaken based upon a physical look around the property, certainly if this is done before any underpinning they may or may not pick up this fact.

Some lenders will go upto 5 times, subject to declared debt being paid off within this.

Be mindful whilst you are utilising credit, it is incredibly important that you pay all of your credit on time when thinking of applying for a mortgage in the near future.

jackyann

I know little of mortgages and the kind of things that Dave is talking about.
But a lifetime of home ownership & knowing lots of self-employed people prompts me to offer this advice before you go to a broker:

Do not push yourself this hard on your credit cards, you could end up in serious trouble.

Get a valuation as the house is NOW. This will help you to decide how the numbers stack up.

holly_hobby

The further issue if you are "maxing" out your credit faciliites, is that this fact ( even if the mge reqd is within their multiples etc) and esp if a LTV in excess of 75% is reqd, will probably ( in fact more than likely) result in a decline, or at best reduce amount offered ... due to the overall level of your commitments (both monthly and borrowings as a whole - notwithstanding you have exhausted all your available emergeny cash avenues, which the lender will all consider as a part to the decision making process).

So you can see this would be a foolish road to go down ... with DH. being aboslutely right - speak to a WOM mge broker before you do anything ...

Hope this helps

Holly

maninthestreet

You have an income of only £7,500 p.a, but currently have unsecured debts of £8,000 ???

Thrugelmir

On an income of £7,500. How can you afford to live and repay the debt owed.

davemal

Thanks everyone ! :T

I will go and have a chat to the mortgage people,
and see where to go from there.

I am also looking at getting some lodgers in , to help.

Cheers all
Dave
ps I'm guessing WOL, is Whole of Life ?

Dave_Ham

Should have put in my post to get some sleep in too!!

Still thinking about this at gone 2am not healthy..

maninthestreet

Like Thrugelmir, I'm wondering how the OP manages to service the monthly payments for £8,000 of unsecured debt with a monthly gross income of only £625....

davemal

lol Dave Ham,
I am awake till 4am most nights and up for noon.
Last night I got in at 1:30am after traveling 100 miles and working 5 hours for £40!

For those interested...
I am taking home £650 a month net,
of that, £120 is the business car loan,
£60 is the business visa
and £80 is the personal visa.

I don't have the heating on in the house, don't have a TV, have a water meter, and live by myself, on microwave meals, don't go out...fix my own car, use a pushbike (and an electric one) where possible, get clothes from charity shops , or ebay. Do repairs to most things myself.
.....so it's quite easy really.

When, or if, I get a mortgage, I shall party hard

I also have a side line in fixing pushbikes to students to get some extra cash (I buy bikes in winter for £8 and sell (after they have been fixed up)
to students in summer for £45 (saving them £80 a mth on buses, taxis)
...but with the horrible weather, that's a no goer atm.

I also sell a few moped rectufiers on Ebay...and have sold a few items on Ebay.
Both these ventures are not great money makers and very intermittent.


Going back to the original question....
I'm wondering, if the business car loan and the business visa will go against me, when I apply for the mortgage...since they are thru the business ( I know I am the business, just wondered if it shows up against me for mortgage application)

I shall ring around today....

Thanks all

Conrad

davemal wrote: »

I shall ring around today....

Thanks all

It can be done but it needs great care. Lodgers and your other income will certainly make things more affordable plus if you are consolodating debt your outgoings should fall.

I'm not here to judge as I've know people like you with very modest incomes that manage perfectly well. I have a client who on £14k pa has managed to pay 2 mortgages and now owns the homes outright valued at £400k, and she's still not 40.

A GOOD brokeknow what to do here. Please beware the clowns that record everything on thier computer only to end upp sending you down a cul de sac. Use someone competent who deals with you like a real person, not some tick box excercise.