Getting Finances in Order

Newlyselfemployed

I have just joined the forum as I thought it would be a good place to start looking for advice on getting my finances in order. I am newly self employed and have taken a bit of time to look at my own finances instead of all my time going into my work.

We have two BTL mortgages both on interest only and one residential mortgage on interest only. As well as 1 loan and a number of credit cards.

The house with the residential mortgage is now let and I wondered if it would be wise at this point to have a discussion with a mortgage company or a broker to see what options are available for tidying up our finances. Any advice on where to start, who to speak to would be very much appreciated.

kingstreet

Could you be more specific about what you aim to achieve? "Tidying up your finances" is a bit vague, TBH.

Is the residential mortgage under a formal consent to let from the lender? Have you changed the buildings insurance to landlord cover?

Newlyselfemployed

Sorry about that it is a bit vague, I guess our financial position today has just evolved through a lack of a plan and now that I have some time to think I want to set in place a proper plan.

The aim would be to minimise interest being paid on debt, reduce monthly outgoings on debt repayment.

The BTL's are on 2.5% and 2.25% interest and the credit cards debts are on promotional rates but the personal loan has a high level of interest (10%) and it is interest only. I feel we are paying a lot out each month but not making a lot of progress in reducing the debt so I thought I should at least look into what options may be available.

The residential loan is at 4.79% with NRAM I have not informed the lender that we are letting as yet but I do have landlord insurance

My husband and I are both self employed now and this has put me off even having a discussion on the residential mortgage although I realise they may be more interested in rental income.

I wondered if it may be an option to turn the residential mortgage into a BTL and bring the personal loan into this?

kingstreet

You're not going to be able to borrow more from NRAM. They are a Government Dept tasked with getting rid of as many loans as possible from the old NR mortgage book.

You may be granted consent to let when you request it, but you won't be able to increase the borrowing. They typically charge around £1,250 per annum for consent and this is comparable to Nationwide which adds 1.5% to the rate and Halifax which insists to a move to a special product at 5.5% fixed for three years with £1,000 fee.

You could look at remortgaging away onto another formal BTL product, subject to rate/cost considerations and if within the usual maximum LTV may be able to borrow more to consolidate debt.

TBH this sounds like a job for a good whole market broker. The help you'll get from a lender directly on this is likely to be very one-dimensional, based on the lender's interest in BTL lending, or not, as the case may be...

Newlyselfemployed

Thank you for taking the time to answer my post. It is a good point about NRAM, we have had the letters offering to let us leave without exit fees etc and this was one of my concerns about speaking to them about letting the property I thought they may use this as a reason to insist we find alternative funding and I was worried we may not be able to do that.
None of the brokers I have used in the past are still trading, a sign of the times I guess. Would you say our self employed status would be a hindrance to the BTL application? I will look out our paperwork, get an idea on current valuation and see if we would meet general LTV criteria. Thanks again for posting it has been helpful for me to write down thoughts and now just need to take some actions!

kingstreet

Newly self-employed and low net profit will be an issue for some lenders, not for others. This is where the good whole market broker comes in, ensuring you are introduced only to lenders who will wish to lend to you.