Who will lend to me ?

Pete_Luffman

I've decided to do a loft conversion and need to borrow 35k. 

I've got a 17% loan to value ratio, excellent credit history, I don't have any debt, I have an income of 30k per year. 

My income is split between 12k per year I receive for my part time position working for a fitness company. Plus I am a live in landlord, meaning I rent 2 rooms in my house and receive approx 1500 pm for them. 

The rental income comes from Air bnb and a chap who stays with me on an adhoc basis. 

Despite showing Santander my previous 3 months bank statements, that show in income of 5k via rent, and despite being a customer with them for 10 years and never missing a payment, they have turned down my application. 

Are there other companies who don't have such strict policies? Who could I apply with and have success? 

MovingForwards

Speak with a while of market mortgage broker as they will know lender criteria and place you with the most appropriate lender for your circumstances.

Brie

I wonder if there is a concern about the renovation work affecting the rental income.  i wouldn't want to stay anywhere that's a construction site.

Pete_Luffman

Brie said:

I wonder if there is a concern about the renovation work affecting the rental income.  i wouldn't want to stay anywhere that's a construction site.

The rental business in Bristol is booming! Not enough beds to go around. I've got the two rooms rented on a permanent basis going forward and could show lenders the signed contracts. Further, after the conversion is done I have 3 rooms to rent so increase my earnings even more. 

K_S

Pete_Luffman said:

I've decided to do a loft conversion and need to borrow 35k. 

I've got a 17% loan to value ratio, excellent credit history, I don't have any debt, I have an income of 30k per year. 

My income is split between 12k per year I receive for my part time position working for a fitness company. Plus I am a live in landlord, meaning I rent 2 rooms in my house and receive approx 1500 pm for them. 

The rental income comes from Air bnb and a chap who stays with me on an adhoc basis. 

Despite showing Santander my previous 3 months bank statements, that show in income of 5k via rent, and despite being a customer with them for 10 years and never missing a payment, they have turned down my application. 

Are there other companies who don't have such strict policies? Who could I apply with and have success? 

@pete_luffman With all due respect, it looks like you are going about this the wrong way around.

You have an income made up of two different components - PAYE income (straightforward if permanent with guaranteed basic) and Airbnb/lodger income (much less straightforward).

You need a potential lender to consider both sources of income as per their criteria. Lender A might consider your Airbnb/lodger income based on the 'Profit from UK land and property' on your SA302 (Tax Calculation generated after you submit your self-assessment) while Lender B might only permit property income from ASTs, not short term lets or lodgers. Lender C might not consider property income at all unless the property is mortgage free. I hope that makes sense?

On top of that there may be other criteria to meet, such as raising capital for structural work, etc.

As the poster above suggested, it may be worth considering speaking to a whole of market broker. If you don't want to pay a fee, then there are a few fee-free brokers suggested on the MSE guide here https://www.moneysavingexpert.com/mortgages/best-mortgages-cashback/

Good luck, hope it gets sorted out!

Pete_Luffman

K_S said:

Pete_Luffman said:

I've decided to do a loft conversion and need to borrow 35k. 

I've got a 17% loan to value ratio, excellent credit history, I don't have any debt, I have an income of 30k per year. 

My income is split between 12k per year I receive for my part time position working for a fitness company. Plus I am a live in landlord, meaning I rent 2 rooms in my house and receive approx 1500 pm for them. 

The rental income comes from Air bnb and a chap who stays with me on an adhoc basis. 

Despite showing Santander my previous 3 months bank statements, that show in income of 5k via rent, and despite being a customer with them for 10 years and never missing a payment, they have turned down my application. 

Are there other companies who don't have such strict policies? Who could I apply with and have success? 

@pete_luffman With all due respect, it looks like you are going about this the wrong way around.

You have an income made up of two different components - PAYE income (straightforward if permanent with guaranteed basic) and Airbnb/lodger income (much less straightforward).

You need a potential lender to consider both sources of income as per their criteria. Lender A might consider your Airbnb/lodger income based on the 'Profit from UK land and property' on your SA302 (Tax Calculation generated after you submit your self-assessment) while Lender B might only permit property income from ASTs, not short term lets or lodgers. Lender C might not consider property income at all unless the property is mortgage free. I hope that makes sense?

On top of that there may be other criteria to meet, such as raising capital for structural work, etc.

As the poster above suggested, it may be worth considering speaking to a whole of market broker. If you don't want to pay a fee, then there are a few fee-free brokers suggested on the MSE guide here https://www.moneysavingexpert.com/mortgages/best-mortgages-cashback/

Good luck, hope it gets sorted out!

Thanks for the insight. 

Do you think having a guarantor will count for anything? 

K_S

Pete_Luffman said:

K_S said:

Pete_Luffman said:

I've decided to do a loft conversion and need to borrow 35k. 

I've got a 17% loan to value ratio, excellent credit history, I don't have any debt, I have an income of 30k per year. 

My income is split between 12k per year I receive for my part time position working for a fitness company. Plus I am a live in landlord, meaning I rent 2 rooms in my house and receive approx 1500 pm for them. 

The rental income comes from Air bnb and a chap who stays with me on an adhoc basis. 

Despite showing Santander my previous 3 months bank statements, that show in income of 5k via rent, and despite being a customer with them for 10 years and never missing a payment, they have turned down my application. 

Are there other companies who don't have such strict policies? Who could I apply with and have success? 

@pete_luffman With all due respect, it looks like you are going about this the wrong way around.

You have an income made up of two different components - PAYE income (straightforward if permanent with guaranteed basic) and Airbnb/lodger income (much less straightforward).

You need a potential lender to consider both sources of income as per their criteria. Lender A might consider your Airbnb/lodger income based on the 'Profit from UK land and property' on your SA302 (Tax Calculation generated after you submit your self-assessment) while Lender B might only permit property income from ASTs, not short term lets or lodgers. Lender C might not consider property income at all unless the property is mortgage free. I hope that makes sense?

On top of that there may be other criteria to meet, such as raising capital for structural work, etc.

As the poster above suggested, it may be worth considering speaking to a whole of market broker. If you don't want to pay a fee, then there are a few fee-free brokers suggested on the MSE guide here https://www.moneysavingexpert.com/mortgages/best-mortgages-cashback/

Good luck, hope it gets sorted out!

Thanks for the insight. 

Do you think having a guarantor will count for anything? 

@pete_luffman Potentially, it depends on the specific lender, whether they accept a guarantor, what relationships to the guarantor are allowed, how they'll factor in affordability, etc.

If you have someone with sufficient income who is willing to put their name to the mortgage (but won't be on the deeds) then a JBSP (Joint Borrower Sole Proprietor) would be a much simpler process than a guarantor as you have multiple mainstream lenders (Barclays and Skipton to name two) that will consider.

Having said all that, given that you're only looking to borrow 35k at low LTV, as long as your 12k is guaranteed basic PAYE and you have SA302s showing your rental profits, you should be fine to apply in your sole name with an appropriate lender.

Pete_Luffman

Thanks so much for your input. Really appreciate it!