Complicated - advice welcome!

vjacx

Hi, this is a little complicated - basically my husband and I would like to move house in order to have more space and my parents retire in another year. The plan is they will sell their house and move to Spain (where they already have property). They want a "base" in the UK, to live in maybe 3 months out of 12 and for this reason we all agreed it would make good sense for my husband and I to purchase a new house with either an annexe or space for a self build log cabin type thing which parents would have. This is where it gets complex - we bought our house new at the height of the house price "boom" for £181k, the house next door has been for sale at £145k for over a year, we owe £136k on mortgage. Not worth selling as we couldn't even scrape a deposit out of it based on that. So we thought we could let it out, letting agents valued rental at the same as our monthly mortgage payments. We don't mind even taking a loss as it makes sense to keep as an "investment" anyway, so we have found a property which we could put down a 10-15% deposit on. Except I went self employed 13 months ago, and only have a years worth if accounts (showing good profit but potentially not over long enough period). Have spoken to an IFA who thinks it's tight but might be doable, in terms of getting mortgage for the other house. Not worried about affordability as we can definitely afford the payments, shortfall in rent etc but mortgage providers might not see it our way :-/

Has anyone got any pearls of wisdom re this? I wondered about approaching current mortgage lender to see if they would let me put current mortgage in my name only which would free up husband to apply for other mortgage alone but apparently they may need 2 years of accounts even though I can prove consistent income and payment of mortgage.

The other thing is, if we go for new property it has expired planning permission for 1 bed bungalow, which would have been perfect except it's expired! Never having done this before I'm concerned if we go through all this and get the house we might then be refused planning? How easy is it to reapply and get permission if it has been there in the past? Sorry, confused! Can see this becoming v stressful!

I_have_spoken

Bank of Mum and Dad? If they sell in UK and already have a place in Spain, can they loan you enough for a hefty deposit to ease the LTV mortgage position?

>How easy is it to reapply <

Should be simple unless there's been a zoning change. You can reapply for PP even if you're not owner to test the water.

BitterAndTwisted

The answer to not having enough money and proof that you have it is always to borrow more and put what you do have at risk. This is a bonkers idea and you should know it. Sit tight, over-pay your mortgage and set aside some decent savings for when you do have three years-worth of accounts. More space is a "nice to have" but not a necessity, especially when you can't afford it.

Guest101

Your current mortgage is residential, expect it to go up 2% or so, whe n you get CTL.

Your rent is ubject to tax, (however the interest part of your mortgage is deductable)

You need Gas Safety Certs, EPC, letting agent fees, landlords insurance.

You need to make sure you protect the deposit and tenant pays, and you need to learn lots

remember if you do this, your home becomes a business, and isnt your home anymore. its the tenants

vjacx

Thanks, bank of mum and dad - not really, it's agreed they will pay the cost of building their "annexe". The IFA is coming back to me next week, I will just keep fingers crossed, I was kind of wondering if any other self employed people had managed to get a mortgage with less than 2 years accounts? I know that more space is nice to have, but equally I work at home and it's reaching a point where a home office is becoming both essential and impossible where we are. Thanks for the advice anyway.

mlz1413

Wait until you have 2 years worth of accounts and then look at mortgage potential again.

I would not let out your home when barely covering the mortgage payments - have a read of a few posts on here to see what a professional tenant can cost you!

I think the sit tight and overpay your mortgage I'd the best advice, mum & dad do not need a base straight away that can be something to work towards.

Forget the bungalow you like with is expired planning - you are not in a position to sell so you are not in a position to buy.

vjacx

Should have also said my parents have properties they let out and have for many years, so have been walked through everything that will be needed, totally not concerned by that and accept the extra costs that will be incurred, have taken all this into account when planning affordability.

mlz1413

Just seen your last post
Look at sharing office space, lots of businesses may have a spare desk that they would take £50 a month for.

It gets paperwork out of your home.

Or can you get a posh shed and lock work up in there?

harrys_dad

vjacx wrote: »

Should have also said my parents have properties they let out and have for many years, so have been walked through everything that will be needed, totally not concerned by that and accept the extra costs that will be incurred, have taken all this into account when planning affordability.

So why did you post asking for advice? This is a bad idea, as you have been told, but you don't agree. So go ahead, do what you want to do.