Remortgage dilemma

jonathan1666

Afternoon all,

I have a really odd and very frustrating dilemma which I would really like to get some help on if anyone can help?

I bought a house (buy to let) in the countryside as I cant afford to buy in London where I rent and work.

At the time I was in a good job and I used my life savings to buy the house which needed some work. I bought the house for £300,000 with a deposit of £190,000 (all of my life savings). I did the work on the house and had it valued at £360,000 recently.

The issue is that I bought the house quickly using a bridging loan (£110,000) as I am self employed and needed to file my tax return in order to get a traditional mortgage. Thinking that I would only need the loan for a couple of months which is fine.

The problem is I lost my job and only just getting back up on my feet since. I have built up some debt since on loan and credit cards (£60,000) however this is manageable for now. The bridge facility is costing me £1100 a month but I am desperate to replace it with a traditional buy to let mortgage. I have a lot of equity in the house and I am now ready to let it however as I have no other real source of consistent salary (I have an income form working freelance and will be in full employment from next month) mortgage brokers are not really happy to enter into conversation.

Is there any facility which will allow me to have a mortgage based on rent and the asset of the house with the equity in it?

Thank you so much for your help in advance.

Jon

foxy-stoat

jonathan1666 wrote: »

Is there any facility which will allow me to have a mortgage based on rent and the asset of the house with the equity in it?

You have described a mortgage there. You wont be able to get a BTL without an income, there will be minimum annual salary/income to qualify for BTL - but your broker has already said that to you.

Options would be to sell it - as you have £60K of debt servicing this bridging loan the time to re-assess your financial situation may be now before your debt eats all the equity you have.

jonathan1666

Thanks for your help, you are right I may have to sell it which would be a shame.

It is an hour outside of London by train and I was planning on eventually moving there, if I moved there early and got a traditional mortgage would that help?

Thanks again.

AdrianC

jonathan1666 wrote: »

...if I moved there early and got a traditional mortgage would that help?

Without an income that you can prove...?


Basically, you seem to want what used to be a self-certified mortgage. They don't exist any more in the mainstream. There might be some left-field ones, but they won't be cheap.

jonathan1666

Thanks again for your help, so just to clarify there is no way that a property can have a mortgage without a consistent income?

Even if the equity within the property is 2/3?

Thanks

Jonathan

AdrianC

The property doesn't "have the mortgage". You do.

It's a large loan, lent to you. It's secured on the property, so that if you don't repay your loan, the lender can repossess the property. That's why they insist on checking the property out, because they want to know that if you don't repay, they stand a chance of seeing their money back.

Back before the financial crash, lenders were throwing money about like there was no tomorrow - they would lend more than the house was worth, they would lend without proof of income. And that's a large part of why the crash came... Now, they don't.

65-70% Loan-to-Value (LtV) is not particularly high, but you are still massively unlikely to get anything self-certified.

ThePants999

Actually 30% LTV, though I don't think that changes the conclusion.

AdrianC

Ah, !!!!!!, read the "equity" comment the wrong way round. Yes, sorry.

jonathan1666

Thanks for your help guys, appreciate it.