Creative mortgage / borrowing options required

pixelwife

Hi All

We have the opportunity to purchase a property close to one of our offices to eliminate £100s of fuel and hotel costs we incur every month travelling to our site.

The value is £160k and we would be able to raise a decent deposit if required.

However, the challenge here is our credit rating has been shot to pieces the last 6 months with very poor cashflow (we're self employed). We have 4 properties at the moment, and 3 mortgages. All but one is now up to date having had arrears.

We have a large amount of equity across the board but we know lenders are very cautious so can anyone suggest the most painless way we could potentially do the deal.

As the place we are buying is a new build, we can get the 5% deposit scheme but we're aware the interest rate on repayments may make this a poor choice.

I look forward to hearing from you mortgage professionals and non-professional superstars who just know a lot about mortgages!

Thanks.

Dave_Ham

This looks way to complicated to give some solutions on a public forum I am afraid, as would need to know loads more information.

If your credit is shot, you will not get away with the 5% deposit scheme.

Also, I am unsure how many mortgages are of a residential nature and how many are buy to let. If many are residential then this limits your options.

Given the horizon as I see, definitely get formal advice.

All the best

pixelwife

3 properties are let, 1 is our home. Not sure what sort of mortgage products I was given (BTL mortgages or residential).

When I say my credit is shot, I mean we have some mortgage arrears. No CCJs, defaults or bankruptcies. Other than mortgages we have no debt; no loans and no credit cards.

Does that open up the 5% scheme?

JimmyTheWig

pixelwife wrote: »

our credit rating has been shot to pieces the last 6 months with very poor cashflow (we're self employed). We have 4 properties at the moment, and 3 mortgages.
...
can anyone suggest the most painless way we could potentially do the deal.

Sell the mortgage-free place and buy the new place with cash?

getmore4less

Usefull info
Whats the value/mortgage for the current properties
who are the mortgages with did they all have arrears how many for how long

Mortgage rates and rent.

years of upto date accounts

projected incomes

Is the plan to move and rent the current home or have two residential.

if the numbers stack up then that will leave the how bads the credit which will restrict lenders.

What about renting a room in a house share near the office in the short term.
What about camping out in the office (is there room to knock up facilities).

pixelwife

JimmyTheWig wrote: »

Sell the mortgage-free place and buy the new place with cash?

Normally the simplest solution would be the best but it's tenanted by family members and this simply isn't an option. But thanks for the suggestion. Try again, you may nail something else obvious which I hadn't thought of

pixelwife

getmore4less wrote: »

Usefull info
Whats the value/mortgage for the current properties
who are the mortgages with did they all have arrears how many for how long

Mortgage rates and rent.

years of upto date accounts

projected incomes

Is the plan to move and rent the current home or have two residential.

if the numbers stack up then that will leave the how bads the credit which will restrict lenders.

What about renting a room in a house share near the office in the short term.
What about camping out in the office (is there room to knock up facilities).

Thanks for all these creative options. They are really thinking outside the box.

The plan is we'll operate 2 residentials and this new one will be where one of us spends 3-4 nights a week to be close to work.

There is no option for camping in the office and hopefully we wouldn't need to look *that* creatively!

I'm thinking I could put together a £40k deposit so surely there'd be a few lenders able to provide a £120k mortgage given the overall portfolio we have is worth at worst £1.5m and our total mortgages are £794k (eek!).

EPL

pixelwife wrote: »

Thanks for all these creative options. They are really thinking outside the box.

The plan is we'll operate 2 residentials and this new one will be where one of us spends 3-4 nights a week to be close to work.

There is no option for camping in the office and hopefully we wouldn't need to look *that* creatively!

I'm thinking I could put together a £40k deposit so surely there'd be a few lenders able to provide a £120k mortgage given the overall portfolio we have is worth at worst £1.5m and our total mortgages are £794k (eek!).

Do you really need a place costing £160k to just spend 3 nights a week ?

getmore4less

For 3-4 nights a room let would likely be the most economical option if this is midweek only even better very attractive to a lot of home owners.

No capital needed, no bill, no maintanence.


Is your sig upto date.

pixelwife

EPL wrote: »

Do you really need a place costing £160k to just spend 3 nights a week ?

It's in London and that really only gets a shoebox in the City! Our company sells high value services so we would get the cost of this property back in around 4 deals. 4 deals we could win by spending more time in the city.

Our longer view is if we were to sell our business in a few years this could easily be rented out or sold on.

So yes we could do it cheaper, but I'm asking how could we move forward with this deal creatively, rather than what other options are open to us for kipping on a friend's floor or in the office stationery cupboard!

pixelwife

Some other options to explore with you bright folks here!

1. Could I potentially add to the borrowing on my main residence (it has just under 50% equity in it and has 10 years to run without overpayments).

2. I could take a mortgage on the unencumbered property and use this cash to make the next purchase (as the unencumbered is on an AST which would cover the mortgage repayments).

3. I could take additional borrowing on BTL2 which has about £80k equity (but I could probably only get a meagre amount out of this one).

4. I could take a big dividend out of the company to cover the lot - with much advance planning. Want to treat this as the backup, backup plan as it wouldn't be great for cashflow.

I have a couple of months to come up with my strategy to achieve this so I'm sure we can find a way!!