Mortgage difficulties
Discussion
Hi, after some advice as this is all confusing me a little. A little background:
I work abroad as a kind of 'seafarer', am liable for UK tax and pay this via self assessment on a yearly basis.
Currently own a 2 bed semi, which I have 25% equity in. Looking at buying a new house with my partner, which is classed as a new build, and also want to change current mortgage from residential to let to buy, and rent it out. Value's for this all work out, IO mortgage £240ish/month, rental value £520.
For info, new house price is 262k, current property (to be rented out) valued at 115k.
Was given the go ahead for mortgages just based on figures before agreeing a price on new property, no details actually put into an application. For the new residential mortgage we have a 10% deposit (not brilliant but is what we can afford at the minute).
We are now having issues with a broker finding anyone to take it on. Problems apparently being my way of paying tax, as its not taken at source, and the fact that the new property is a newbuild.
Should this really be an issue? I would have thought so long as the affordability works out, and that I can prove I am a taxpayer (which I have), then it shouldn't be too much trouble? What impact does being a newbuild have on it?
I work abroad as a kind of 'seafarer', am liable for UK tax and pay this via self assessment on a yearly basis.
Currently own a 2 bed semi, which I have 25% equity in. Looking at buying a new house with my partner, which is classed as a new build, and also want to change current mortgage from residential to let to buy, and rent it out. Value's for this all work out, IO mortgage £240ish/month, rental value £520.
For info, new house price is 262k, current property (to be rented out) valued at 115k.
Was given the go ahead for mortgages just based on figures before agreeing a price on new property, no details actually put into an application. For the new residential mortgage we have a 10% deposit (not brilliant but is what we can afford at the minute).
We are now having issues with a broker finding anyone to take it on. Problems apparently being my way of paying tax, as its not taken at source, and the fact that the new property is a newbuild.
Should this really be an issue? I would have thought so long as the affordability works out, and that I can prove I am a taxpayer (which I have), then it shouldn't be too much trouble? What impact does being a newbuild have on it?
Some of the current lending rules seem bonkers.
For example; say you have some BTL properties where mortgage payments are £500 and rental income is £2kpcm. First Direct/HSBC will knock £500 PLUS Council Tax PLUS water rates off your net disposable income and then base the amount they are willing to lend you on the lower figure. In other words they assume that ALL your properties become vacant at the same time and that you'll still be required to cover all the fixed costs. They assume a worst case scenario and then make it even worse
I went to a broker recommended by a colleague. He found me something ideal pretty quickly. He's in the Manchester area so let me know if you want his details.
For example; say you have some BTL properties where mortgage payments are £500 and rental income is £2kpcm. First Direct/HSBC will knock £500 PLUS Council Tax PLUS water rates off your net disposable income and then base the amount they are willing to lend you on the lower figure. In other words they assume that ALL your properties become vacant at the same time and that you'll still be required to cover all the fixed costs. They assume a worst case scenario and then make it even worse
I went to a broker recommended by a colleague. He found me something ideal pretty quickly. He's in the Manchester area so let me know if you want his details.
mrpbailey said:
Hi, after some advice as this is all confusing me a little. A little background:
I work abroad as a kind of 'seafarer', am liable for UK tax and pay this via self assessment on a yearly basis.
Currently own a 2 bed semi, which I have 25% equity in. Looking at buying a new house with my partner, which is classed as a new build, and also want to change current mortgage from residential to let to buy, and rent it out. Value's for this all work out, IO mortgage £240ish/month, rental value £520.
For info, new house price is 262k, current property (to be rented out) valued at 115k.
Was given the go ahead for mortgages just based on figures before agreeing a price on new property, no details actually put into an application. For the new residential mortgage we have a 10% deposit (not brilliant but is what we can afford at the minute).
We are now having issues with a broker finding anyone to take it on. Problems apparently being my way of paying tax, as its not taken at source, and the fact that the new property is a newbuild.
Should this really be an issue? I would have thought so long as the affordability works out, and that I can prove I am a taxpayer (which I have), then it shouldn't be too much trouble? What impact does being a newbuild have on it?
Lenders just don't like New Build properties. Usually because the actual value of them can be distorted by a few variables such as what phase of the development your property was in (Eg the first lot might be more expensive than the last lot as they try to shift them) and also the incentives included in the price such as white goods, flooring, carpets and garden landscaping etc etc.I work abroad as a kind of 'seafarer', am liable for UK tax and pay this via self assessment on a yearly basis.
Currently own a 2 bed semi, which I have 25% equity in. Looking at buying a new house with my partner, which is classed as a new build, and also want to change current mortgage from residential to let to buy, and rent it out. Value's for this all work out, IO mortgage £240ish/month, rental value £520.
For info, new house price is 262k, current property (to be rented out) valued at 115k.
Was given the go ahead for mortgages just based on figures before agreeing a price on new property, no details actually put into an application. For the new residential mortgage we have a 10% deposit (not brilliant but is what we can afford at the minute).
We are now having issues with a broker finding anyone to take it on. Problems apparently being my way of paying tax, as its not taken at source, and the fact that the new property is a newbuild.
Should this really be an issue? I would have thought so long as the affordability works out, and that I can prove I am a taxpayer (which I have), then it shouldn't be too much trouble? What impact does being a newbuild have on it?
Therefore than require more deposit than an older property. A 90% mortgage shouldn't be too hard for a competent Broker to source.
If you hit a brickwall, I'm a Broker, feel free to drop me a line, happy to have a chat!
berlintaxi said:
I would be interested in his details if its no trouble, thank in advance.
His name is Elliot Halter (see linky below)http://heritagemortgages.co.uk/
The whole process was fast and painless whereas with First Direct, with whom I've been banking for 20+ years, it was like pulling teeth.
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