How easy should this mortgage be?
Discussion
My wife and I are looking at moving.
Our house is paid for, no debts.
Reasonable pensions coming in.
Ideally, I'd like to mortgage our current house and use the proceeds to buy a new place and get it how we want it before moving in.
Can't face months of a building site!
Plan is then sell current place and settle mortgage in full.
Should be easy - yes?
By BiL is in the same boat. He's had an offer accepted on a place and asked the very same question of two building societies.
Knocked back by both due to "affordability" and they would only do a mortgage for a minimum of 3 years!
He and I can both well afford the mortgage payments for the 6 months we require out of savings.
His current gaff is £600K, mortgage free and he owns 2 industrial units worth about 450K also mortgage free.
The house they want is £450K with about £50K in improvements needed. So a loan of £500K and well within 95% limits.
Have the gurus got any suggestions please?
Seems daft that building society won't help. Easy money I'd have said.
Our house is paid for, no debts.
Reasonable pensions coming in.
Ideally, I'd like to mortgage our current house and use the proceeds to buy a new place and get it how we want it before moving in.
Can't face months of a building site!
Plan is then sell current place and settle mortgage in full.
Should be easy - yes?
By BiL is in the same boat. He's had an offer accepted on a place and asked the very same question of two building societies.
Knocked back by both due to "affordability" and they would only do a mortgage for a minimum of 3 years!
He and I can both well afford the mortgage payments for the 6 months we require out of savings.
His current gaff is £600K, mortgage free and he owns 2 industrial units worth about 450K also mortgage free.
The house they want is £450K with about £50K in improvements needed. So a loan of £500K and well within 95% limits.
Have the gurus got any suggestions please?
Seems daft that building society won't help. Easy money I'd have said.
Speak to Sarnie, he might be able to suggest something.
I suspect you are very unlikely to secure lending through normal channels though - even more so at 95%.
Once you get into bridging loans etc then you are talking serious interest rates. That's if you are suitable.
I think your easiest option is to move and put up with it being a building site!
HTH.
I suspect you are very unlikely to secure lending through normal channels though - even more so at 95%.
Once you get into bridging loans etc then you are talking serious interest rates. That's if you are suitable.
I think your easiest option is to move and put up with it being a building site!
HTH.
55palfers said:
My wife and I are looking at moving.
Our house is paid for, no debts.
Reasonable pensions coming in.
Ideally, I'd like to mortgage our current house and use the proceeds to buy a new place and get it how we want it before moving in.
Can't face months of a building site!
Plan is then sell current place and settle mortgage in full.
Should be easy - yes?
By BiL is in the same boat. He's had an offer accepted on a place and asked the very same question of two building societies.
Knocked back by both due to "affordability" and they would only do a mortgage for a minimum of 3 years!
He and I can both well afford the mortgage payments for the 6 months we require out of savings.
His current gaff is £600K, mortgage free and he owns 2 industrial units worth about 450K also mortgage free.
The house they want is £450K with about £50K in improvements needed. So a loan of £500K and well within 95% limits.
Have the gurus got any suggestions please?
Seems daft that building society won't help. Easy money I'd have said.
This is one of your main problems;Our house is paid for, no debts.
Reasonable pensions coming in.
Ideally, I'd like to mortgage our current house and use the proceeds to buy a new place and get it how we want it before moving in.
Can't face months of a building site!
Plan is then sell current place and settle mortgage in full.
Should be easy - yes?
By BiL is in the same boat. He's had an offer accepted on a place and asked the very same question of two building societies.
Knocked back by both due to "affordability" and they would only do a mortgage for a minimum of 3 years!
He and I can both well afford the mortgage payments for the 6 months we require out of savings.
His current gaff is £600K, mortgage free and he owns 2 industrial units worth about 450K also mortgage free.
The house they want is £450K with about £50K in improvements needed. So a loan of £500K and well within 95% limits.
Have the gurus got any suggestions please?
Seems daft that building society won't help. Easy money I'd have said.
"Plan is then sell current place and settle mortgage in full."
Lenders do not like being used as cheap, short term finance. They aren't in it for a few months interest which may only be a few hundred pounds.
If you have no earned income, that will be a problem too.......
Thanks for the response Sarnie.
Hmm, I see.
Quite happy to reward a lender for their trouble. It's straightforward, zero risk business transaction for them surely?
As to "no earned income". Our pensions (State and private) are guaranteed until we die. How many employees can say the same?
Looks like I'll put a caravan on the drive for a few months then.
Hmm, I see.
Quite happy to reward a lender for their trouble. It's straightforward, zero risk business transaction for them surely?
As to "no earned income". Our pensions (State and private) are guaranteed until we die. How many employees can say the same?
Looks like I'll put a caravan on the drive for a few months then.
55palfers said:
Thanks for the response Sarnie.
Hmm, I see.
Quite happy to reward a lender for their trouble. It's straightforward, zero risk business transaction for them surely?
As to "no earned income". Our pensions (State and private) are guaranteed until we die. How many employees can say the same?
Looks like I'll put a caravan on the drive for a few months then.
It might be low risk but there's very little in it for them.Hmm, I see.
Quite happy to reward a lender for their trouble. It's straightforward, zero risk business transaction for them surely?
As to "no earned income". Our pensions (State and private) are guaranteed until we die. How many employees can say the same?
Looks like I'll put a caravan on the drive for a few months then.
Also, a Residential mortgage if for the property you live in as your main residence.
As soon as you ask them for additional lending they will ask what the money is for. As soon as you tell them that it's to renovate another property that you will then move into, selling their security property in the process, they will decline your application.....
The reality is that you need a Bridging loan, but you will have to "reward" the loan company with healthy fees and rates......
55palfers said:
As to "no earned income". Our pensions (State and private) are guaranteed until we die. How many employees can say the same?
There are quite a few additional risks though:- One borrower dies and the income halves
- Both borrowers die and you have to enforce against the estate + the term shortens so you don't get all your interest
- Social care costs absorb the income
- Dealing with a borrower with dementia is difficult and opens up the bank to regulatory risk
- Borrowers become "vulnerable" and hard to evict if they stop paying / can't pay
NickCQ said:
55palfers said:
As to "no earned income". Our pensions (State and private) are guaranteed until we die. How many employees can say the same?
There are quite a few additional risks though:- One borrower dies and the income halves
- Both borrowers die and you have to enforce against the estate + the term shortens so you don't get all your interest
- Social care costs absorb the income
- Dealing with a borrower with dementia is difficult and opens up the bank to regulatory risk
- Borrowers become "vulnerable" and hard to evict if they stop paying / can't pay
Doesn't most of that apply to any borrower at any time? Unexpected death or serious and debilitating injury or illness resulting in being unable to work? Or having another child that eats into income. Life is full of risks. My plan presents no extra ones.
Anyway....
Spoke to my bank and they are perfectly happy to offer me a two year fix mortgage at their normal rates over a 13 year term. i.e. until the oldest mortgagee is 80.
No problem settling in full after two years.
red_slr said:
What bank is that and what rate are they offering?
Lloyds. I've banked there for 50 years. Just my first port of call really.Not sure of rate yet. Have to arrange a face-to-face in the local branch. Chap on phone said it was "one of our standard mortgages" and "we do this a lot"
I'll keep you updated.
Mind you, this was only a vague idea we discussed for the first time last week. Pondering a smaller garden and on a quieter road. Since the call to my bank Mrs 55P has been haunting estate agents web-sites. EEK!
loafer123 said:
You need a decent mortgage broker.
My mum has sorted ~£1m bridging finance to buy a new house before she's sold her old one, and she's "83, you know".
The difference here being that the majority of bridging finance is unregulated and the lenders in that market are used to taking credit support from the property value rather than the borrower's earnings. An interest rate of 0.5% or more a month also gives a lot more cushion for credit risk, and a short term (12 months) negates a lot of the concerns about lending into retirement.My mum has sorted ~£1m bridging finance to buy a new house before she's sold her old one, and she's "83, you know".
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