80k deposit but cant get any type of Mortgage please help

AFK_Matrix

nospaceforbaby wrote: »

thanks, I have a bit of a mental block on renting as it seems like wasted money, however I will have a search and see if anything is cheap. the flat is a ground floor new build flat next to a London tube station so as it has now passed the stamp duty value of 250k I am confident it will continue to grow in value, we have spoken to a company who gurantee the rent so I am confident it will be a no hassle assett so would like to retain.

Ha love that bit I have put in bold. Please go on over to the housing part of this forum and read up on what YOUR responibilities are when being a landlord. Just because you have found a company to manage the property the buck still stops with you. What if the tenant trashes the flat? Have you factored in the gas safety checks etc? The increased cost of insurance? Have you even got permission to rent out your flat from your lender, this could up your mortgage amounts depending what they say or they may even refuse!!

PLEASE do a lot of research into renting your flat out!!

Bantex_2

Bought 7 years ago in london and no equity.
Are you sure?

nospaceforbaby

Bantex wrote: »

Bought 7 years ago in london and no equity.
Are you sure?

yes bought in 2006 for 240k, now worth 250-255k so I am told, if I sell it will only just cover the fees involved so this is why I am renting it out, plus why would I sell now if I cant get a mortgage for another place - then I would be homeless so not really a good idea with a baby coming dont you think, I would rather focus on the objective of getting a mortgage and buying a house, thanks

jamesmorgan

nospaceforbaby wrote: »

thanks, I have a bit of a mental block on renting as it seems like wasted money, however I will have a search and see if anything is cheap.

Whilst there are many non-financial reasons for buying rather than renting, you need to be clear on the financial aspects. In the short term, most mortgage payments are used to pay off interest rather than capital. For example, in the first 3 years of a 25 year mortgage at 5%, around 70% of the mortgage payments are used to pay off interest. This is as dead money as rental payments.

If you purchased a £350K property with a 5% mortgage (and no deposit) then over the first 3 years around £1450/month is being paid to cover mortgage interest and around £600/month is paying off capital. Rental yields in London are very low at the moment (around 4% in some parts). At this yield, you could potentially rent the same property for £1150/month. So buying you have £1450/month dead money vs £1150/month with renting. The main financial argument against this is that being out of the housing market is a risk if we experience high HPI, but if you continue to keep the rental property this offsets this risk.

So from a financial viewpoint, renting for 3 years rather than buying presents few financial risks. During that time period you can structure your finances to help secure a mortgage more easily (and your CCJ's will be that much older).

nospaceforbaby

jamesmorgan wrote: »

Whilst there are many non-financial reasons for buying rather than renting, you need to be clear on the financial aspects. In the short term, most mortgage payments are used to pay off interest rather than capital. For example, in the first 3 years of a 25 year mortgage at 5%, around 70% of the mortgage payments are used to pay off interest. This is as dead money as rental payments.

If you purchased a £350K property with a 5% mortgage (and no deposit) then over the first 3 years around £1450/month is being paid to cover mortgage interest and around £600/month is paying off capital. Rental yields in London are very low at the moment (around 4% in some parts). At this yield, you could potentially rent the same property for £1150/month. So buying you have £1450/month dead money vs £1150/month with renting. The main financial argument against this is that being out of the housing market is a risk if we experience high HPI, but if you continue to keep the rental property this offsets this risk.

So from a financial viewpoint, renting for 3 years rather than buying presents few financial risks. During that time period you can structure your finances to help secure a mortgage more easily (and your CCJ's will be that much older).

thanks for this, I remembered why we have an issue with renting - we have two Cats that we would need to get rid of in order to rent, I looked at renting a cheap place a while back - my plan was to rent out my place at 1200 a month and rent somewhere else cheaper outside the commuting belt at say 600 a month, same standard of living but just not paying for the london proximity that I dont need as I work from Home - the search was really unsuccessful as I was unable to find anywhere to rent with two Cats, we would need to get rid of the Cats in order to rent which would be an upsetting last resort. I have just been looking at houses in South Wales for 100k which I could buy with no mortgage, they look fine to me and I love the idea of living with no bills, I would be so relaxed and free to spend time with baby, now I just need to convince Wife that South Wales is a good idea.

nospaceforbaby

Mortgage_Mark wrote: »

...because YOU are her employer. I could employ my wife too, but they see it as a risk that it could not be a genuine contract/job, since she has a contract with you.

thanks for this, if we get a decline tomorrow from the lender we applied to yesterday I will know that they have realised that my Wife is working for a company registered to me, in which case I will sign over the majority share ownership of one of my other ltd companies to a trusted 3rd party, pay in my Wife salary to her via that other company/director - that way her 100k salary would be coming from another director/company and there would not be a direct link to me thus validating the perceived status of her permanent employment. Can anyone see any reason why this would be declined? it costs about 60 quid to set up a new firm plus whatever I would need to pay someone to become director of it. thanks

glentoran99

nospaceforbaby wrote: »

thanks, it would be a huge sum if we lived somewhere else but in London/Surrey we need around 300-350k purchase price - ideally I would live somewhere else, I like mountainbiking and I would love to live in Wales in a house costing maybe 60k, no mortgage happy life - my Wife is Slovakian and again I could live in a mansion over there for about 200k euro - however my Wife does not want to move and has friends around the Surrey hills area, she is stubborn as hell and just shouts and cry`s if I suggest slovakia or somewhere cheap like the midlands where im from - I dont want her getting upset while pregnant so I am working 6 days a week trying to hustle a bigger deposit together for a 350k home in Surrey area. The flat is another issue, if I sell it I will break even and make no gain - if I rent it out I will gain as the property value rises but also I will gain maybe £100 a month in profit as the rental income exceeds my mortgage payment on it, the flat does not cause me any concern its just the issue of getting into a house locally ans securing the mortgage to do so, I was also thinking of getting an employed job again in order to get some earnings record back but this would be a drop in earnings of about 50% as my skills pay about 65k a year salary which would be at 40% tax on PAYE so I would be earning a lot less just to get some earnings record built up. Can anyone explain to my why I cannot just pay my Wife more, build up her payslips so that she can get the mortgage with her perfect credit score, 80k depos and payslips showing 100k salary on PAYE? THANKS

because her bank statement would need to tally with the payslips

nospaceforbaby

glentoran99 wrote: »

because her bank statement would need to tally with the payslips

thanks, her bank statement would show the funds going into her bank at 100k salary so it would tally?

Bantex_2

nospaceforbaby wrote: »

yes bought in 2006 for 240k, now worth 250-255k so I am told, if I sell it will only just cover the fees involved so this is why I am renting it out, plus why would I sell now if I cant get a mortgage for another place - then I would be homeless so not really a good idea with a baby coming dont you think, I would rather focus on the objective of getting a mortgage and buying a house, thanks

have you had a valuation done, where I am (SE London) prices have nearly double since 2006

GMS

How much does your wife earn from you now?


Lenders have seen every trick in the book. Inflating wages to get the finance is an old trick.


Be careful what you do. Ending up on the naughty list could stop you obtaining credit in the future.