Can this be done?

dizza

A bit of background first, my husband and I are 55 and 53. He has a pension of £900 a month and has recently started his own business which brings in £1000 a month, but it has only been up and running for 3 months. as a new business we also get £550 a month from the Government on a new business benefit.
We have savings of £40,000. Our credit score is in the mid 900`s
We have been in rented accommodation for 4 years, paying £1200 a month, but are now looking to buy our final house. We live in an expensive area and expect to have to pay around £280,000 for a property.
We own a property in another part of the country which is valued at £315,00 and is currently used as a holiday let, we intend to sell when the contract with the agent runs out next May.
However, we do not wish to wait another year until purchasing.
Is it possible to secure 2 mortgages against the property, say one for £120,000 with one lender and another for £140,00 with a different lender, to enable us to go ahead and purchase? I ask this because I realize we will be unable to get a large mortgage from just one lender.
Any ideas? many thanks in advance.

kingstreet

You want to borrow £260k with negligible income (you don't mention yours at all), some from an unverifiable source - short self-employment.

You also want the loan secured over two properties, one of which is a holiday let.

There is no conventional way to approach this, I'm afraid. The interest on £260k at 4%pa is £867 a month. How would you pay this?

somethingcorporate

Just wait a year and avoid the high costs you will no doubt incur if you do proceed with your plan.

pjread

If no one lender will loan you that, I doubt you've much chance getting a second lender to accept a second charge. even if you did, I'd expect a high rate (5.5-6% maybe) which I'd expect to be unaffordable.

But what's the letting situation, does rental income cover a straight forward BTL-type mortgage on that alone?

dizza

We would pay the mortgage from income, not a problem as mentioned we already pay £1200 a month in rent, the lender would see this from our records. I was thinking more of is it possible to secure 2 mortgages from 2 lenders on the holiday let?

dizza

The income from the holiday let is used to cover my parents care needs, on average it brings in approx £1200 a month, but there is none spare, the AST tenancy rate is £1000 a month.

dizza

Should have said there is no mortgage on the holiday let.

kingstreet

Lenders don't look at what you are paying now. The FCA tells them how they confirm affordability and it just isn't there for the size of mortgage you want.

Typically, for a normal borrower to get that much on a full twenty-five year term, they'd need to be earning £57k a year, a lot more with a shorter term as they are approaching retirement.

pjread

Kingstreet hit the nail on the head. What you're paying in rent is irrelevant and they won't look at it unfortunately.

You might be able to do something with bridging finance but I'd steer clear personally. Can't you just stick it on the market now? I doubt the penalties with your agent are all that bad for early break of contract? (of course, then wait for sale before buying... which could be a while potentially)

amnblog

Wait a year. Focus on getting the business going.