Mortgage Free but low income - looking to borrow via Mortgage

sammorey121

Hi,

I'm after some advice based upon my friends circumstances below - he is trying to borrow some money from the house he owns outright in London which is Mortgage free - however appears to be in a unique situation that falls between the gaps of traditional mortgage lending.

- He owns a house in London that has been valued at £1,200,000.00. No mortgage & freehold in his name.
- He started a business 3 years ago where he has a 50% share in the business.
- Income in the past 12 months was £24,000 - through salary & dividend. The 12 months previous was £8000.
- He gets rental income from lodgers but this cannot be counted against his income for lending.
- Credit card debt of £7000
- Personal loan of £5000

He wants to borrow £50,000 as a mortgage against the house to consolidate debts & complete house improvements. He has approached mortgage brokers who don't seem to be able to lend and is now considering the less known banks in order to gain the lending.

Any thoughts on this and whether high st banks would lend against this. It seems very odd as the LTV would be perfectly in his favour.

Thanks in advance

Regards

Sam

Thrugelmir

sammorey121 wrote: »

It seems very odd as the LTV would be perfectly in his favour.

Unfortunately debt consolidation is the issue. £12k of debt on his income is significant. Not only that but another £38k on top as well. Sets the alarms bells ringing.

minimike2

Maybe downsizing would be a better option.

Pixie5740

Mortgage brokers don't lend money they give advice and help source you a mortgage. So has he actually approached mortgage brokers to try and find him a mortgage or has he been going direct to lenders?