Another remortgage question(S)

Rosiesworld

Hiya
been lurking thought it about time i posted

Our RBS 4.89% fixed rate mortgage deal ends the begining of june and we have recieved a letter saying they want us to stay here`s 5.69% looks competetive better than the 7.44% SBV :eek: so thinking about it its easier with them as its only a phone call and a couple of signatures.

This is where it gets interesting.
My OH has gone self employed since original mortgage same job, just now self employed If we stay with RBS they are unlikely to need proof of income
He gets
£445 per week wages
£175 per week tax credits inc child
£18 per week child benefit

I earn around £8k per year

The reason we get so much tax credits is the nice tax man says he can claim 40p/mile for 10k and 25p/mile thereafter. that and washing uniform and lunches etc. then that wipes out all his earnings meaning he his running at a loss. however he really isnt but his books will say matters are pretty poor

Car finance £188 pm
fuel £520 pm approx

other than that its just normal house hold bills

So thats our history

On to a few questions

We have always wanted to get into property development but in the current climate we may hold off a while.
If we remortgage to a LTV of 95% with RBS that would give us £43k up our payments by about £300pm but if we change to interest only that could bring it down.
If we put that £43k into an ISA or similiar it should make us more in interest than we pay (only a good thing)

Our thinking is we can afford to pay a little bit more out each month and If there is a house price crash we would have remortgage whilst there was still value and would therefore have the funds in place to put a sizable deposit down on a second property.
Does this sound feasable

Any help or more ideas would be greatly appreciated
Ro

MarkyMarkD

Firstly, you can't remortgage with RBS.

You can switch products (your first option) or you can switch products and take a further advance (your second option).

Secondly, you will need to prove your income to get the further advance. And your income is pretty much zero. So you won't get the further advance.

Even if you could, you can't put £43k into an ISA, and you can't earn more than 5.69% after tax very easily at all.

I don't think you should be considering mortgage stoozing in your financial circumstances, to be honest.

UK007BullDog

Hear hear. I am going to put it a bit harsher.

You have a negligent income, you have kids, the interest rates are going up and house prices are going down.

You should concentrate on paying off your mortgage and saving. Do not risk your home because you saw on TV or read about property !!!!!! and how easy it all is.

Property development is expensive and unless you have experience in it do not go near it especially not in a falling market.

£8K x 2.5 = £20K max borrowing. So no chance as your OH is showing zero income. According to this you should not be able to have your current mortgage. Which means you will have to take RBS's best deal they can offer you. You cannot remortgage to another lender.

And definately forget about the BTL as you cannot borrow the amount you need for a new place.

MarkyMarkD

I think "negligent income" is a bit harsh! I think you meant "negligible income".

Rosiesworld

UK007BullDog wrote: »

£8K x 2.5 = £20K max borrowing. So no chance as your OH is showing zero income. According to this you should not be able to have your current mortgage. Which means you will have to take RBS's best deal they can offer you. You cannot remortgage to another lender.

And definately forget about the BTL as you cannot borrow the amount you need for a new place.

Thats the problem we have

I wouldnt say we are on a low income we clear about £30k after fuel and finance. Its just a case of getting around that problem. We dont mind putting our "property developing empire" on hold until the market changes. If the general concensus is that rates are going up then we will grab the 5.69%

But for future referance how do we get a lender to look at how much we are left with as opposed to what the books say

Ro

MarkyMarkD

You can't. If you are self-employed, your income is your statutory total income i.e. what your accounts say you earn.

UK007BullDog

The books rule I am afraid. You want your cake and eat it too. But the lenders are wise and now with many pulling out of self cert too its going to be even harder. They want to see some profit to ensure you can afford it. According to the books you cannot. So the lender will not be interested.

MarkyMarkD

The HMRC rates for mileage reimbursement aren't meant to be profitable, anyway. In the long-term you are unlikely to make that much out of them, unless you constantly run bangers.

UK007BullDog

MarkyMarkD wrote: »

I think "negligent income" is a bit harsh! I think you meant "negligible income".

I always forget to hit the spell check. I guess the glass of port is not helping either. I thought I better drink some and refill the cupboard before Sunday.

Rosiesworld

MarkyMarkD wrote: »

The HMRC rates for mileage reimbursement aren't meant to be profitable, anyway. In the long-term you are unlikely to make that much out of them, unless you constantly run bangers.

I dont make the rules. got a car, very good on fuel, low tax, cheap insurance an a mate who`s a mechanic

At least we havnt got a v8 range rover and putting that and all that fuel etc through the books

Rosiesworld

I was talking to my OH about this again this afternoon and we remembered that RBS didnt ask to see any of his pay slips as he banks with them, they did want to see mine but not his.
They did want his employer to fill in a questionare to say his job was permenant and fill in his salary.

Its not like we cant afford to pay we have just done the budget calculator and have an excess of £1000 a month

I Know its a little untoward but there was a time when people where telling little white lies to get a mortgage.
I was reading a post the other day about an honest chap whos broker was fidling his income and he wasnt happy about it even though he could afford the repayments and a number of people couldnt see any problem