Ive got a 100K in cash and cant get a 50K mortgage. Really?

Fillippobasso

Howdy,

To summarise...

I have 100K in cash and am looking to buy a house for 130K approx. Ideally i would like to keep 20K aside for any refurbishments I might need etc...

So I am prepared to put down 80K and was hoping to get a 50K mortgage over 25 years and be paying back roughly £250 a month. Once more I would be renting one of the rooms to a friend for £250 a month. That alone would pay off the mortgage and obviously half my bills (council tax, water, gas, electricity, internet.) in the process.

The stumbling block it seems is that I have only recently become a taxi driver and although I work for a firm I am classed as self employed. According to the mortgage advisors I have spoken to... I need to have at least 2 years accounts before I can get a mortgage.

I dont make much as a taxi driver around £1,600 a month. almost half of what i was making in my old job, but its easy and stress free and as i am single and have no dependants, it is more than enough for me to live on.

I confess i dont really know how the system works! but surely if for some unforseeable reason i cant muster together 250 quid a month:rotfl: to pay my mortgage, coldnt the lender reposess my house, get their 50K back and the 80K i put down as a deposit?

I should have lenders biting my hand off for me to take out a mortgage just on the off chance i default on my payments


I dont get it

ACG

You need 1 years accounts as a minimum.

The lender does not want to repossess the property, they want you to pay and they want to show the FCA that you can afford the mortgage if they walk in and ask to see your file.

With no accounts there is no evidence you can afford the mortgage.

Fillippobasso

What a wack system!

The lender may not want to repossess the property but they can if they so wish. its a 100% guarantee that they will get their payment and some... which a years worth of accounts doesn't provide. If after I provide a years worth of accounts I could quit, get the sack, get run over by a bus. A years worth of accounts wont help the lender get their money back then

middleclassbutpoor

Might sound daft and costs alone may not make it workable but do you need a mortgage - could you look at unsecured debt to finance the difference?

Could you get a loan for the £30k - over 7 years is about £455 at a 5.9% apr. Yes you would need to forego the refurbishment straight away but may be possible if you have a good history with your bank etc.

Im not suggesting you overburden yourself and with your level of income, it may be difficult to borrow so much but it may be another option for you to look at seeing as you know that you cannot get a mortgage for at least a year.

ACG

Fillippobasso wrote: »

What a wack system!

The lender may not want to repossess the property but they can if they so wish. its a 100% guarantee that they will get their payment and some... which a years worth of accounts doesn't provide. If after I provide a years worth of accounts I could quit, get the sack, get run over by a bus. A years worth of accounts wont help the lender get their money back then

At that point they can say when they lent you the money they could see you had an income.
The FCA are happy and you can not go to the papers and say they leant me money with no evidence of me being able to afford it and now they have taken my £80k deposit.

Or the harsh answer is - their money, their rules.

Fillippobasso

Yes that is probably the route I will have to go down. I was told the most I could get as unsecured loan was 25K... I could afford the repayment but might be a tad short of asking prices for 2 bed houses in my town. They all seem to start around the 130K mark. it would be close and with the amount I earn I am not going to be able to save money like I used to, and due to circumstances I am really looking to get my own place within next couple of months max. I could probably find something a little cheaper but it will be undoubtedly be rundown and in a really rough neighbourhood which isn't something I want.

The only reason I was looking into get a 50k mortgage was that it would give me a bit more breathing room to play with

Fillippobasso

I think the system is bizarre. as long as I agree to my deposit being used as a guarantee I don't see what the issue is. but as you said their money their rules

sparkey1

You have 100K in cash, and so need 30K.

Most banks offer personal loans of up to 25K. Some even go to 50K.

Do you have credit cards? Whats are your limits. Can you borrow on a new 0% deal and do a cash transfer?

Thrugelmir

Fillippobasso wrote: »

The lender may not want to repossess the property but they can if they so wish.

Lenders wouldn't wish to. Mortgage lending is a low margin business. Repossession costs them a whack of money. Better to eradicate the risk as far as possible at the outset.

Fillippobasso

sparkey1 wrote: »

You have 100K in cash, and so need 30K.

Most banks offer personal loans of up to 25K. Some even go to 50K.

Do you have credit cards? Whats are your limits. Can you borrow on a new 0% deal and do a cash transfer?

No I don't have any credit cards. only debit cards. I don't have a clue what my credit rating is but I have never been in debt, overdrawn or even taken out a loan before.

Fillippobasso

Thrugelmir wrote: »

Lenders wouldn't wish to. Mortgage lending is a low margin business. Repossession costs them a whack of money. Better to eradicate the risk as far as possible at the outset.

well if that's true I guess it makes a little more sense