Unique situation - £80k cash but no mortgage - what to do?

sanel_2

Building_Surveyor wrote: »

This makes no sense???[/QUOTEI

If getting buy to let mortgage ( if you have 80k in cash) doesn't make sense to you, I question your skills described in your avatar.

kingstreet

sanel wrote: »

Don't understand your problem if you have 80k in cash. Just get buy to let mortgage and you can surely get property for over 130k. Providing that you get a good interest rate, monthly payment shouldn't be over £300-400. Talk to mortgage broker and they will explain you that you don't have any problem but that you are in a driving seat.

Have you devised a plan to get around the minimum personal income rules employed by most lenders and the need to be a homeowner for many of them and those that are left?

Lenders view such cases as an attempt to circumvent the affordability requirements for a residential mortgage and suspect the applicant is buying a property to live in, not to let.

carslet

sanel wrote: »

Don't understand your problem if you have 80k in cash. Just get buy to let mortgage and you can surely get property for over 130k. Providing that you get a good interest rate, monthly payment shouldn't be over £300-400. Talk to mortgage broker and they will explain you that you don't have any problem but that you are in a driving seat.

It is almost impossible to get a BTL mortgage without already having a residential mortgage or it being your first mortgage

Cisco001

Is your £80k loan or gift?

Could you put your family member name in deed to obtain a mortgage?
(I don't know what tax implication if you do so...)

With the current situation, I don't see how you pay back £80k to them...

BigAunty

Since the 17k includes benefits such as child tax credit/child benefit, perhaps working tax credit, I'm assuming the OPs husband gets around 12k per annum, National Minimum wage or so? To the OP - what is his actual salary without benefits?

It might be worth their while checking their benefit entitlements on the Turn2us online benefit checker again as I'm surprised that there is no HB entitlement. It does start tapering off if a household has more than 6k in capital though.

Even without a default, I can't see how they could make the stretch to pay for the cheapest 3 bed, as it requires a lender to loan 40k on a low salary excluding benefits, plus take into account the 80k loan repayments, so that's perhaps a fantasy.

The problem with involving family in the purchase is that if there are issues paying it back, for example, the OPs husband loses his job, it can cause the family relationship to break down.

LittleVoice

Leah-Ray, are you a graduate? Is your husband a graduate?
If you are going to home educate your children, does this have to be you who does so on your own?

What sort of employment could you obtain? Would it be more financially rewarding than your husband's current job?

Building_Surveyor

sanel wrote: »

Building_Surveyor wrote: »

This makes no sense???[/QUOTEI

If getting buy to let mortgage ( if you have 80k in cash) doesn't make sense to you, I question your skills described in your avatar.

Get a grip and read back your post! I suggest you question your own skills in writing plain English and using spell check.

Secondly The advice you gave the OP was a complete load of nonsense. As a first time buyer you are adving the OP to get a buy to let mortgage when they are trying to get out of renting and are struggling to get a mortgage on a 17k income. How on earth will a buy to let help their situation? They don't have a big enough deposit other than a loan, so please explain how a buy to let will help them move???

carslet

Building_Surveyor wrote: »

sanel wrote: »

Get a grip and read back your post! I suggest you question your own skills in writing plain English and using spell check.

Secondly The advice you gave the OP was a complete load of nonsense. As a first time buyer you are adving the OP to get a buy to let mortgage when they are trying to get out of renting and are struggling to get a mortgage on a 17k income. How on earth will a buy to let help their situation? They don't have a big enough deposit other than a loan, so please explain how a buy to let will help them move???

Exactly..

As I said it is virtually impossible to get BTL mortgage with out already having a residential one, and also usually 25k income, there is no way they would qualify for it.

sanel_2

Building_Surveyor wrote: »

sanel wrote: »

Get a grip and read back your post! I suggest you question your own skills in writing plain English and using spell check.

Secondly The advice you gave the OP was a complete load of nonsense. As a first time buyer you are adving the OP to get a buy to let mortgage when they are trying to get out of renting and are struggling to get a mortgage on a 17k income. How on earth will a buy to let help their situation? They don't have a big enough deposit other than a loan, so please explain how a buy to let will help them move???

Ok, My first mortgage ever was BTL. You can't do it by going to bank and asking for the R mortgage because you won't get it. But if you go to broker and explain situation, there should be no problem. 80K ,what they claim to have available, is more then enough to get house they're interested in ( they don't even have to put that amount). If they currently pay £600 pm, BTL mort. would be much cheaper ( with a good interest rate).
So, main thing is to find a good broker.

BigAunty

sanel wrote: »

So, main thing is to find a good broker.

Good brokers are a must.

But overall the OP wants to borrow £110k to £120k, around x8 - x10 her husband's income (if benefits are excluded from this).

Granted the majority of this is from an overseas loan and yes, the repayments are apparently around the level of the rent that is paid.

But that's a horrible loan to income ratio by any measure.

Currently, if he loses his job, they will qualify for housing benefit. As homeowners, they'd perhaps get 2 years maximum Support for Mortage Interest payments on just the interest part of mortgage lenders loan, perhaps covering around 10-20% of their two loan obligations. It's quite likely, however, that SMI in its current form will be scrapped and the state help turned into a loan, perhaps through a charge placed on the property.

Low income households don't own property. The OP, who has decided to prioritise full time home education for her kids instead of taking up employment (not a criticism, just an observation, I support home schooling) so that lifestyle preference also impacts their true ability to get on the housing ladder.

Its also worth her keeping her eye out for the future impact on her household with the proposed changes to the Universal Credit system and tax credits are scrapped. I don't know if it is specifically exempting home schooling parents (I doubt it) but there is more conditionality expected to be in place with parents expecting to both be in full time employment when their children reach certain ages. The benefits forum can provide info on the future employment expectations under UC. Tax credits in their current form are on their way out.