£50k income + 6 houses but 0% chance of a loan 30 July 2021 at 11:49AM in Loans 21 replies 1.3K views

p3ncilsharpener

superbigal said:

Sell one of your properties.
Thank You

It might have to be more than one.  If the OP is doing what a lot of BTL landlords do which is going interest only there may not be much capital in each property.

dingobingo

superbigal said:

Sell one of your properties.
Thank You

Lol, no thanks. Terrible advice.

dingobingo

p3ncilsharpener said:

superbigal said:

Sell one of your properties.
Thank You

It might have to be more than one.  If the OP is doing what a lot of BTL landlords do which is going interest only there may not be much capital in each property.

65% LTV average

p3ncilsharpener

dingobingo said:

p3ncilsharpener said:

superbigal said:

Sell one of your properties.
Thank You

It might have to be more than one.  If the OP is doing what a lot of BTL landlords do which is going interest only there may not be much capital in each property.

65% LTV average

Then it seems like sensible advice.  It's not clear how much you can actually afford to repay on the cards but even if it was £1k mentioned a month that'll still take you 4 years and you'll end up paying around £15k in interest.

dingobingo

Hmm, my goal is to re-mortgage one property. So the advice to enable me to do that is to sell another property? I'd rather keep things as they are and keep the appreciating asset. I don't care about the c cards, I've had them for nearly 10 years, they get paid by rent. 

Interesting point about loan interest rate though. I assumed it would be something like 10%, I had no idea it might be more than credit cards, there'd be no point people taking them out if that's the case.

p3ncilsharpener

dingobingo said:

Hmm, my goal is to re-mortgage one property. So the advice to enable me to do that is to sell another property? I'd rather keep things as they are and keep the appreciating asset. I don't care about the c cards, I've had them for nearly 10 years, they get paid by rent. 

Interesting point about loan interest rate though. I assumed it would be something like 10%, I had no idea it might be more than credit cards, there'd be no point people taking them out if that's the case.

With the risk you pose, you're in subprime territory.  They're don't do "low" interest rates.

dingobingo

Ok thanks.

Thrugelmir

dingobingo said:

Hmm, my goal is to re-mortgage one property.

For what purpose. An empire built on debt carries an enormous risk of coming crashing down like a house of cards. 

Nebulous2

Debt of more than 50% of income is often seen as a red flag. You have crossed a line which will give most lenders reason to refuse or load the interest rate. 

Grumpy_chap

I hate to say this but, based upon the information shared, a lender may view that the OP is one short void period (or tenant default) or one adverse event (new boiler / storm repair) from a financial crisis.  That may not be the case, as there may be more to the OP's full financial position than is apparent from the thread but what we have so far is:

1. Income of £50k between salary and rental profit as per tax return.
How much of that is salary?
How much of the rental income that makes its way to the tax return is consumed in letting expenses that are not deductible against tax?  I'm particularly thinking of restrictions in mortgage interest and mortgage capital repayments, or are the mortgages all interest-only?

2.  6 houses
I assume that is one private residence and 5 rental properties

3.  £30k unsecured CC debt.
Does that mean no emergency fund?

4.  Remortgage plans to bring the mortgage payments down from £450 per month to £250.  
Is this the total monthly cost of all mortgages?  OR just the mortgage on one property?
How much of the £450 (or £250) is interest and how much is repayment?
How many of the 6 properties are mortgaged?
Mortgages are 65% LTV - on the rental properties that could mean that the nett contribution to monthly cash flow from the rental properties is actually quite low once mortgage interest and all other expenses are fully taken into account.

While I understand the OP's reluctance, the suggestions to reduce the number of properties by 1 may not be a bad one if that allows the OP to bring the overall financial position into one with some enhanced resilience and "head room".  Doing so may give the OP the luxury of time (and yielding full value) rather than risk an unplanned event resulting in financial crisis and "fire sale" of one of the properties under duress.