Mortgage question, furlough, rent!

LittleDrum

We are currently going through the process of moving home, my husband has just been told he is going on furlough for 1 month.  Which is annoying as we are right in the middle of our application.  I was thinking of perhaps putting the house back into my name only, affordability calculators (without taking into consideration my outgoings) say I can afford up to £327k.   We need a mortgage of £360k...  If I was to charge my husband "rent" would they take that into consideration when going through my salary and other incoming money and allow me to borrow what we need?!  Just wondering if that was an option.

K_S

Unfortunately no, that's not going to fly

Looks like you are a high earner so there may be higher multiple products available to you potentially. Did you get the max borrowing figure from a broker?

Plus, if your husband has a firm return date from furlough, and is being paid 100% during furlough, there may still be options available.

LittleDrum

K_S said:

Unfortunately no, that's not going to fly

Looks like you are a high earner so there may be higher multiple products available to you potentially. Did you get the max borrowing figure from a broker?

Plus, if your husband has a firm return date from furlough, and is being paid 100% during furlough, there may still be options available.

I thought as much.. We only need £315k for the mortgage but wanted to borrow extra to build the extension rather than move and then ask for more.
Perhaps I will speak to a broker..

MWT

LittleDrum said:

Perhaps I will speak to a broker..

Might as well start with K_S then as they are already here

They are not allowed to approach you by the rules of this group, but you can reach out to them...

CSL0183

LittleDrum said:

K_S said:

Unfortunately no, that's not going to fly

Looks like you are a high earner so there may be higher multiple products available to you potentially. Did you get the max borrowing figure from a broker?

Plus, if your husband has a firm return date from furlough, and is being paid 100% during furlough, there may still be options available.

I thought at much.. We only need £315k for the mortgage but wanted to borrow extra to build the extension rather than move and then ask for more.
Perhaps I will speak to a broker..

£315k to move home 
£360k to move home and build a £45k extension? £45k isn’t going to get you much, perhaps 20sqm at best. Going through something similar myself but in the £150-200k region and financing the extension is a right pain.  

Why wouldn’t you just go for the lower £315k mortgage but with a higher LTV (best you’ll get just now is 85%) and that way you can use part of your deposit (£45k) to fund the extension?

LittleDrum

CSL0183 said:

LittleDrum said:

K_S said:

Unfortunately no, that's not going to fly

Looks like you are a high earner so there may be higher multiple products available to you potentially. Did you get the max borrowing figure from a broker?

Plus, if your husband has a firm return date from furlough, and is being paid 100% during furlough, there may still be options available.

I thought at much.. We only need £315k for the mortgage but wanted to borrow extra to build the extension rather than move and then ask for more.
Perhaps I will speak to a broker..

£315k to move home 
£360k to move home and build a £45k extension? £45k isn’t going to get you much, perhaps 20sqm at best. Going through something similar myself but in the £150-200k region and financing the extension is a right pain.  

Why wouldn’t you just go for the lower £315k mortgage but with a higher LTV (best you’ll get just now is 85%) and that way you can use part of your deposit (£45k) to fund the extension?

It's not a large extension, just squaring off the back (it's a Victorian house) it's large enough to make a difference to the kitchen

We will be porting the current mortgage (Fixed rate ends in May 2021 even if we move in March we would still need to pay £5k ERC) and borrowing against a tracker mortgage with no fixed term or ERC.. so once the work is done we would combine the 2 mortgage into one on a fixed rate.  That was the plan anyway.

Thrugelmir

What's the rush. Schedule the works after the product term has finished. Not as if you are going to start the minute that you move in. Saves the ERC. 

LittleDrum

Thrugelmir said:

What's the rush. Schedule the works after the product term has finished. Not as if you are going to start the minute that you move in. Saves the ERC. 

We still need to borrow extra as the house we are buying is £60k more than the house we are selling. So we thought just add the additional needed too for the extension at the same time.  And we thought also that the extension and new kitchen dining area (and new utility room) could potentially add value so we were going to wait until the work had been completed to get another fixed term mortgage.  Even if it added £15-20k in value that could reduce the LTV slightly to a better rate?