35% equity plus another home, but still struggling to be approved new mortgage?

matchplayer

We have owned our own home outright since Dec 2019. We have been renting it out to our Son & his girlfriend for the last 3 years while we moved into my fathers house & spent £20,000 doing it up. He has now passed away & i need to buy out my brother & sister from their share of the house. We had agreed a price based on valuation when we moved in, so that we could spend time improving it whilst living there. We have been saving very well since Dec as we knew the amount we would require as a mortgage when required. As we are 55/56 years old we are looking for a mortgage over 12/13 years. We are confident we can pay in 10, by overpaying each year. 3 times now we have been advised we can get the required £100,000 but after proper application that figure has been reduced to £66K & £69K. One lender wont include rental from other home as it is family members, even though we have a proper tenancy agreement in place. Not one of theses lenders has asked about any savings we have? We transfer money every month out of our main account into a savings account. We know from doing this we can easily pay £1,000 per month. Mortgage should be around £720, but they are offering us around £500. We have no debts, no loans. I have 3 credit cards. 1 for business, paid in full every month, 1 for any major spends, just as extra insurance safety with purchase, again paid in full when used. 1 other occasional use had for 20 years and always paid in full. Is there any way we can use our other home as security for the extra amount. My brother & sister have been very good so far with waiting, I hate keeping them waiting any longer. where am i going wrong? House is valued at £155000 we require £100,000 so 35% equity. 

[Deleted User]

There's no reason for them to ask about your savings. If you were able and willing to spend the savings on the house, you'd simply increase your deposit.

They'll assume any savings are ear marked for something else.

Salemicus

You need a mortgage broker who can help you. 

Thrugelmir

If you have savings, borrow less.  Lenders work on affordability not equity available. 

getmore4less

Longer term may be an option. 

Would the siblings be able to act as lenders or do they need the cash? 

getmore4less

If you valued it before your refurb why do you only have 1/3 equity on £150k
Your LTV should be based on current market value(probate) as that is what you are buying unless you protected your interest in the property with the £20k input

If father still owned it 100% there is going to be some gift element from the siblings. 

ACG

Is the rental income on the property declared on a self assessment? If not, the it is in effect undeclared income and so if you are not declaring it to the tax man, it cant be used as income. 

Savings do not really affect a mortgage. Lenders are generally interested in income to support the mortgage. 

You need to stop making applications and check everything before you apply.  The way I tend to work is to write down a list of issues and then call up our contacts at the lenders and run all of the issues by them as you could find 1 or 2 issues are acceptable but when combined, are not. 

matchplayer

Correct not declared on a self assessment form, that was ignorance on our part, as their was no profit. Property was initially put up for sale. then we realised our Son & friend were looking for a flat, so we agreed to let them ours as long as they paid enough to cover mortgage & council Tax. That was only cleared in Dec, so i have only classed it as income on mortgage application as of January 2020. That should have been filed with self employment, however it is not required until January 21. I will however get that filed asap. its only £1350 profit.