Mortgage or Loan, unemployed but own home outright

Abyss

Hi
Hoping for some advice please!

DH and I paid off our mortgage at the end of 2011.
I estimate that the property is worth c£250k.

DH is currently employed. I am a SAHM.
DH is planning on giving up his current job to work for himself, and initially isn't expecting to make much money. We will be living very frugally on savings.

We need to do some renovations to the house, and have had quotes for £40-50k for the work that needs doing. Once the work is done, we plan to rent it out, and use this money to pay off the loan ASAP.

We have been in a state of limbo, however, as we are waiting to find out if next door get the planning permission that they want, the result of which will impact what we have done ourselves (party wall). This has dragged on for over a year now, and we have no idea how long it will take, but we gambled that they would get the planning permission they need, and we will then be able to make a much larger space with the extra wall they get, so worth it in the long run, for the extra income that would generate over the years.

So, our problem is, when do we apply for a loan, will we get one if DH isn't working but we own the property outright, or do we apply for one now, paying interest for who knows how many months until the planning permission is sorted, and what's best, a loan or remortgage?

Thanks.

dimbo61

Where do you plan on living while your home is rented out ?

Building_Surveyor

thats exactly what i was gonna ask???

dimbo61

So you have a property worth £250K GOOD
You are a SAHM with no income BAD
Your husband is working GOOD
Your husband wants to leave his job and become self employed with no/low income for some time BAD
You want to borrow £40-50K from the bank but will have no income BAD. ( Lenders like to see 3 years of accounts if self employed!!) so will say NO to a loan as you have no way of repaying the loan let alone provide for a family.
Planning permission next door is nothing to do with you unless you have objected to this!
If you ask for £40/50K from the bank they will ask what you want the money for ? and if you say to do work on your home they may well require the planning permission and plans for the work

Abyss

My inlaws want us to stay with them. They also have a holiday home in the UK which is empty, so we will be spending time with them and then at the holiday home as and when we adults need a break from communal living!

dimbo, thanks. I was just wondering if we could get a loan based on the fact that we own the property outright, as that would be our security? The loan will be repaid once we have tenants in.

It is a bit complicated re next door, but basically we are hoping they DO get the planning permission they want as if they do, we will be able to get an extra room in the attic conversion. We don't want to progress our renovations until we know what next door can do.

dimbo61

You are looking at a BTL mortgage if you are going to rent the property out.
You need to speak to a mortgage broker

Abyss

Ok, thanks.