mortgage required

theGrinch

I have seen a property that is of interest to buy renovate and sell on. The vendor has indicated he will accept £385,000.

The market rent is around £500pw. The resale price is around £500k.

I have about £110k available so I need a 85% LTV mortgage.

No proof of income.

any suggestions please?

Casual

I'd try the self-certification route.

Although I'm new to all this mortgage game this was the route I ended up taking.

As long as you have 15% deposit and thus looking for a 85% mortgage then you can do this option.

I've just secured one through Birmingham Midshires (via an Independent Advisor) and it seems pretty good to me.

If your basic salary is not enough to generate a decent enough mortgage (with the outdated silly mutliplier thing) then this is the better option for you.

My salary would have given me a smaller mortgage than I wanted even though I knew that I would be able to make the monthly repayments on a larger amount. I think they figure that as you're putting up (and potentially risking) 15% of your own money then you must be a reliable enough person to worry about the 85% that they would be risking on you.

I hope this is useful to you.

Casual

Oops, forgot to also say that self-cert mortgages were originally designed for people with no proof of income (i.e. self-employed, money launderers those types!)

So it should be perfect for you.

My Dad has been self-employed for over 30 years and he swears by them. No, I mean, literally swears.....but that's only when he gets his bank statements!

herbiesjp

@ Casual

The silly multiplier thing as you put it still applies to self certifed mortgages such as those offered by BM.

So if your salary was not enough to get a conventional mortgage I do not see how you would have got this agreed with BM.

Other brokers who post on this board along with myself, such as dunston, payless et al do not condone the mis-use of self certifed mortgage and go to great lengths to point out that mis-use of such schemes could be commiting fraud.

ManAtHome

Casual wrote:

I think they figure that as you're putting up (and potentially risking) 15% of your own money then you must be a reliable enough person to worry about the 85% that they would be risking on you.

Not quite - they figure that if you default they can sell the property for the 85% (of their valuation anyway), and chase you for the rest if it falls short. Banks and B/Socs don't take much risk on secured debt.