£70K income and cannot borrow £180K with impeccable credit score/rating HHHEEELLLPPP!

bramptonnozzers

Hello, help or advice needed.
We are looking to extend our bungalow and need to raise another £30,000 on our mortgage however we own 9 rental properties and our lenders (NATWEST) are now taking into account the buy-to-let mortgages held with a different lender.
We have employment income of £35,000 + £10,000 rental income
and £13,000 + £12,000 rental income. Our house is worth £240,000 and currently owe £150,000. We need another £30,000 to build the extension and would prefer an offset as this would suit the rental income and the building work (only borrow the money to pay for the builders as the work is being done). 2X our joint income is not a stretch by any means. But the 7 lenders (Barclays, Lloyds, nastiest, nationwide, first direct, halifax and forgot the other) are now adding our buy-to-let mortgages to the maximum borrowing (maximum mortgage exposure they say). Our rentals are all 80%LTV and the portfolio mortgage is £840,000 so when you add that to the £180,000 we want to borrow against ours then they say we are asking for 15X our joint income COMPUTER says NOOO!
Does anyone know of any lenders who use common sense instead of geek written robot operating computer software? Bring back self-cert mortgages! er scrub that last comment
Rental income is 3X mortgage payment so plenty of safety net.
Pulling our hair out so any tips advice welcome.
Cheers karl

haras_nosirrah

Most lenders won't use rental income if there is a mortgage on the rental property as if you have no tenant it is a liability not an income.

Natwest won't do this - they won't do any further lending if you have more than something like 10x income outstanding in mortgages

Have you gone direct to banks or spoken to a broker - a broker will be able to do the donkey work

Dave_Ham

Guarantee you have gone into the branch and seen someone ill equipped or a inexperienced broker.


This should have a home, based upon the information provided thus far.


Engage a broker

Thrugelmir

bramptonnozzers wrote: »

Does anyone know of any lenders who use common sense instead of geek written robot operating computer software?

Rental income is 3X mortgage payment so plenty of safety net.

In the financial world common sense applies what if. As yes, the roof does fall in (so to speak) on somebody every day, and it's the lender carrying the risk as your speculate with borrowed money.

£1 million of debt - every point rise in rates reduces your cashflow by £10k. In fact 3% would wipe out completely your rental income.

What would be the impact if several of your properties weren't generating any income concurrently?

Is the rental income quoted your net pretax profit?

bramptonnozzers

Your right horas, 10 x income natwest quoted. However 2 years ago we had the same properties with lower income and rental cover and they would have lent us £270-£285k, instead we bought a rundown bungalow and borrowed £150k. Their lending criteria has now changed and at the end of the appointment the robot left the room and returned with a pension brochure. 1-0 to the robots I surrender!

Agree with the broker bit Dave, just wondered if any other landlords had the same issue. Ringing the broker next week if this forum proves unsuccessful.

GMS

Natwest not keen on portfolios in the background as you have seen.

Plenty of others will consider. Speak to a broker.

I assume you declare rental income to HMRC?

bramptonnozzers

Yes GMS, landlord for 14 years and always paid my taxes when due, new pick-up truck keeps the tax bill down though (need to justify it to the missus).

Dave_Ham

The more you detail, the more I would expect a solution - maybe not the pick up truck part.


You are unlikely to find the answers on the forum, as those who may well know where to place will not specify as not got full visibility and those who may comment specifically are probably guessing.


Incidentally the robots are about 10-0 up at the moment.

bramptonnozzers

Thrugelmir, completely agree a 3% rate rise tomorrow would wipe out all profits, but I assume there are a vast number of businesses and very large businesses that would suffer the same fete with half the rate rise. Interest rate rises have always attracted rent rises so I'm not too concerned there.
Also agree with the lenders taking the risk but isn't business about how much of a risk you you are prepared to take?
June 2012 we were offered £285K in addition to our buy-to-lets and now we are apparently over borrowed by almost half a million!
Thats a big big swing, I just dont recall a significant financial crisis in the last 24 months to justify or warrant such a significant change in their lending criteria.

bramptonnozzers

I took my ball home when the robots got 7
Just hoped for a pointer in the right direction because talking to the staff at the banks were not happy times. One advisor was looking on Zoopla to find a valuation of the Fire House we once lived in! That was a short meeting.
Cheers folk

Thrugelmir

bramptonnozzers wrote: »

Interest rate rises have always attracted rent rises so I'm not too concerned there.

There's no linkage between interest rates an rents. Other than landlords covering their costs. For the majority of people in real terms their disposable incomes buying power is decreasing. So rent rises may not be the way to retain tenants.

Thats a big big swing, I just dont recall a significant financial crisis in the last 24 months to justify or warrant such a significant change in their lending criteria.

Banks have been progressively tightening down since the events of 2007/08. Still some way to go as well.