Remortgaging on very low income

midge406

My sister had a very messy divorce a few years ago and when she remortgaged under her own name the only mortgage her mortgage broker could get was a buy to let mortgage. This was because she works part time as a driving instructor due to having two children and makes around £4300 a year. She survives on this plus around £5000 working credits and help from our parents. she is obviously not meant to be living in the house.

The house is worth £130000 and she owes £68000 so she has around a 52% ltv. The interest rate is 4.29% and the mortgage is over 31 years and payment is around £360 a month.

On the ltv rate she could get a residential mortgage with nationwide where the interest rate is 2.54% and the payments are the same but the length would be 20 years.

The question however is whether there's any chance of getting the mortgage based on her income. I am encouraging her to make an appointment with nationwide but she is worried about drawing attention to herself.

I am hoping for advice about the following:

- is there any way she could get a mortgage based on her income given the low ltv? Would she have more chance if she keep the mortgage period at 31 years reducing the payments but allowing her to overpay to £360 a month which she can manage?
- would nationwide be duty bound to report her for living in a house with a buy to let mortgage?
- would it help if my parents went as guarantors? They own their own house but are on low income pensions.
- I could join her mortgage as my income (31000k) would mean that she would meet the lending amount but my partner and I are looking to buy a second flat next year and keep our current flat as a buy to let and I'm worried about not being able to do that if I join my sisters mortgage. My partner also earns 31000k a year.

Sorry for this lengthy post. Any and all help would be much appreciated.

libf

Nationwide will not lend more than 4.75x income, so she can't take it on herself as residential with them.

Whilst wanting to help your sister is admirable, don't. It will only cause fraction in your relationship. Point her in the direction of a broker to find out if any other lenders would consider her.

midge406

Does anyone have any advice on how to get a mortgage on such a low income? Or would she be better off just keeping on paying the buy to let mortgage for now?

HappyMJ

I'd stay as she is. It's unlikely she'll get any mortgage on that level of income.

As has been said don't be a guarantor for a mortgage it will affect your or your parent credit.

4.29% isn't a terrible rate it's quite reasonable. Bringing it down temporarily to 2.54% won't save a huge amount. Nationwide's follow on rate is 3.99% and that's the rate you really should be looking at.