Mortgages - Offset, Low Income, Big Deposit - Anyone ?
Discussion
Lets say I haven't got a mortage and I own my £600k house outright.
I'd like to borrow against it to buy more property but because I'm "retired" I can't prove income.
Is there any way to get an offset Mortage against my current house - ie effectively giving me say a £300k "overdraft"
As I've spoken to a few brokers and I can't find anyone who'd even consider it yet I'd still have £300k left in the property so there is no risk.
Cheers
I'd like to borrow against it to buy more property but because I'm "retired" I can't prove income.
Is there any way to get an offset Mortage against my current house - ie effectively giving me say a £300k "overdraft"
As I've spoken to a few brokers and I can't find anyone who'd even consider it yet I'd still have £300k left in the property so there is no risk.
Cheers
No risk???
The main risk that any lender consider is "Will this client be able to repay the monthly installments?"
If you don't have a job or a sufficient pension income then you've got no chance. You can't offer up 50% of your property as security for the other 50% you've borrowed against and expect them to not be interested in how you intend to repay the £300k they have borrowed you. They want guarantee's that you can pay the monthly payments which (most importantly to them) includes interest/profit to them.
The main risk that any lender consider is "Will this client be able to repay the monthly installments?"
If you don't have a job or a sufficient pension income then you've got no chance. You can't offer up 50% of your property as security for the other 50% you've borrowed against and expect them to not be interested in how you intend to repay the £300k they have borrowed you. They want guarantee's that you can pay the monthly payments which (most importantly to them) includes interest/profit to them.
redgriff500 said:
Lets say I haven't got a mortage and I own my £600k house outright.
I'd like to borrow against it to buy more property but because I'm "retired" I can't prove income.
Is there any way to get an offset Mortage against my current house - ie effectively giving me say a £300k "overdraft"
As I've spoken to a few brokers and I can't find anyone who'd even consider it yet I'd still have £300k left in the property so there is no risk.
Cheers
Why have you put retired in quotation marks?I'd like to borrow against it to buy more property but because I'm "retired" I can't prove income.
Is there any way to get an offset Mortage against my current house - ie effectively giving me say a £300k "overdraft"
As I've spoken to a few brokers and I can't find anyone who'd even consider it yet I'd still have £300k left in the property so there is no risk.
Cheers
Are you actually earning? If so can you prove that income? (Think 75K of proving that income)
Do you have pension income over and above any other income?
What you're really asking about is self cert, and it simply doesn't exist.
(Non-verfication exists, but tis not the same.)
No risk as they can't lose their money as my house is currently valued at £600k - if they'd only lent on this basis we'd not be in the mess we currently are !
The money would be used to buy and sell property which I've done before. I wouldn't actually spend all £300k the balance effectively pays for the interest.
Yes I've done this before using self Cert - that how I ended up with my house paid off.
If I can't get a Mortage as such who supplies large loans against property and at what kind of rates ?
An offset suits me as I can borrow what / when I want and there's no hoops to jump through meaning I can buy wrecks at auction.
A standard monthly repayment loan is of no interest to me as I don't know what I need until I buy it.
The money would be used to buy and sell property which I've done before. I wouldn't actually spend all £300k the balance effectively pays for the interest.
Yes I've done this before using self Cert - that how I ended up with my house paid off.
If I can't get a Mortage as such who supplies large loans against property and at what kind of rates ?
An offset suits me as I can borrow what / when I want and there's no hoops to jump through meaning I can buy wrecks at auction.
A standard monthly repayment loan is of no interest to me as I don't know what I need until I buy it.
redgriff500 said:
No risk as they can't lose their money as my house is currently valued at £600k - if they'd only lent on this basis we'd not be in the mess we currently are !
The money would be used to buy and sell property which I've done before. I wouldn't actually spend all £300k the balance effectively pays for the interest.
Yes I've done this before using self Cert - that how I ended up with my house paid off.
If I can't get a Mortage as such who supplies large loans against property and at what kind of rates ?
An offset suits me as I can borrow what / when I want and there's no hoops to jump through meaning I can buy wrecks at auction.
A standard monthly repayment loan is of no interest to me as I don't know what I need until I buy it.
Nope still lost me....The money would be used to buy and sell property which I've done before. I wouldn't actually spend all £300k the balance effectively pays for the interest.
Yes I've done this before using self Cert - that how I ended up with my house paid off.
If I can't get a Mortage as such who supplies large loans against property and at what kind of rates ?
An offset suits me as I can borrow what / when I want and there's no hoops to jump through meaning I can buy wrecks at auction.
A standard monthly repayment loan is of no interest to me as I don't know what I need until I buy it.
House = 600k owned = 600k
House = 600k owned = 300k mortgage = £300k (£1800 per month) pocket = £300k
Now you use the £300k in your pocket to buy/do up/whatever to sort out new place.
Or are you saying that the £300k is used for a) new place and b) £1800 mortgage on old place?
So in actual fact circa £1100+ a month of the money you actually borrowed is being used to pay the interest alone on that money that is now mortgage, meaning if you do nothing for a year you have just paid £12k+ for the privilege of holding your own money.
redgriff500 said:
No risk as they can't lose their money as my house is currently valued at £600k - if they'd only lent on this basis we'd not be in the mess we currently are !
Mortgage lenders don't currently think like that. They have to prove that they are lending responsibly. A bloke that can't prove income isn't a responsible loan to make.redgriff500 said:
If I can't get a Mortage as such who supplies large loans against property and at what kind of rates ?
An offset suits me as I can borrow what / when I want and there's no hoops to jump through meaning I can buy wrecks at auction.
Very few without evidence of income. None that do an offset or even a revolving credit facility. An offset suits me as I can borrow what / when I want and there's no hoops to jump through meaning I can buy wrecks at auction.
You might, I suppose, be able to put a commercial facility in place, but you'll pay for it, and need to have a very costy relationship with your bank.
There is only one other way of maybe doing it, but you would have to bank with a specific High street name.
redgriff500 said:
A standard monthly repayment loan is of no interest to me as I don't know what I need until I buy it.
Again you're falling foul of the lenders. You might feel you don't need a standard mortgage, but thats what offset is, it just happens to have offsetting built onto it.Du1point8 said:
Nope still lost me....
House = 600k owned = 600k
House = 600k owned = 300k mortgage = £300k (£1800 per month) pocket = £300k
Now you use the £300k in your pocket to buy/do up/whatever to sort out new place.
Or are you saying that the £300k is used for a) new place and b) £1800 mortgage on old place?
So in actual fact circa £1100+ a month of the money you actually borrowed is being used to pay the interest alone on that money that is now mortgage, meaning if you do nothing for a year you have just paid £12k+ for the privilege of holding your own money.
Not with an Offset.House = 600k owned = 600k
House = 600k owned = 300k mortgage = £300k (£1800 per month) pocket = £300k
Now you use the £300k in your pocket to buy/do up/whatever to sort out new place.
Or are you saying that the £300k is used for a) new place and b) £1800 mortgage on old place?
So in actual fact circa £1100+ a month of the money you actually borrowed is being used to pay the interest alone on that money that is now mortgage, meaning if you do nothing for a year you have just paid £12k+ for the privilege of holding your own money.
It's like having a £300k overdraft.
Zero cost until it's used then you only pay on the amount you've borrowed.
So zero cost - buy a house borrow £150k - pay £xx / month
Spend £20k on the house - pay £xxx / month
Sell house pay back into offset.
Zero holding cost until you buy the next one
redgriff500 said:
Du1point8 said:
Nope still lost me....
House = 600k owned = 600k
House = 600k owned = 300k mortgage = £300k (£1800 per month) pocket = £300k
Now you use the £300k in your pocket to buy/do up/whatever to sort out new place.
Or are you saying that the £300k is used for a) new place and b) £1800 mortgage on old place?
So in actual fact circa £1100+ a month of the money you actually borrowed is being used to pay the interest alone on that money that is now mortgage, meaning if you do nothing for a year you have just paid £12k+ for the privilege of holding your own money.
Not with an Offset.House = 600k owned = 600k
House = 600k owned = 300k mortgage = £300k (£1800 per month) pocket = £300k
Now you use the £300k in your pocket to buy/do up/whatever to sort out new place.
Or are you saying that the £300k is used for a) new place and b) £1800 mortgage on old place?
So in actual fact circa £1100+ a month of the money you actually borrowed is being used to pay the interest alone on that money that is now mortgage, meaning if you do nothing for a year you have just paid £12k+ for the privilege of holding your own money.
It's like having a £300k overdraft.
Zero cost until it's used then you only pay on the amount you've borrowed.
So zero cost - buy a house borrow £150k - pay £xx / month
Spend £20k on the house - pay £xxx / month
Sell house pay back into offset.
Zero holding cost until you buy the next one
say you used £XXXk, where is the money for the £XXXk going to come from?
still the same
offset = 0k as full paid up
offset = -200k to buy new house and do up
time taken to renovate = 3/4 months
time taken to buy 1-2 months
where does the money come from to pay back on the interest, etc on the offset if as you say you have limited income for up to 6 months?
Du1point8 said:
What pays the offset back?
say you used £XXXk, where is the money for the £XXXk going to come from?
still the same
offset = 0k as full paid up
offset = -200k to buy new house and do up
time taken to renovate = 3/4 months
time taken to buy 1-2 months
where does the money come from to pay back on the interest, etc on the offset if as you say you have limited income for up to 6 months?
The spare £100k pays back the interest.say you used £XXXk, where is the money for the £XXXk going to come from?
still the same
offset = 0k as full paid up
offset = -200k to buy new house and do up
time taken to renovate = 3/4 months
time taken to buy 1-2 months
where does the money come from to pay back on the interest, etc on the offset if as you say you have limited income for up to 6 months?
I know how it works I've been doing it for years just now I can't get a self cert.
Yet I've got more money than ever before.
I guess the easy option is to set up a Co. pay myself a £75k salary take the hit on tax / NI then get a std offset Mortgage.
Seems ridiculous.
redgriff500 said:
I guess the easy option is to set up a Co. pay myself a £75k salary take the hit on tax / NI then get a std offset Mortgage.
You'll need a couple of years accounts. If you are a director owning more than 20% of a litd firm, you'll be treated as self employed and therefore need history.Your tax returns & SA302's can also be used, but they would have to show enough income to support mortgage.
You have no income.
You borrow £300k.
Buy house for £150k, spend £50k on it.
Market tanks you can only sell it for £175k.
Then what?
You have £275k (minus transaction fees) to pay back £300k plus interest and no income.
In the olden days "property always went up", but I think a few institutions have got stung on that assumption.
You borrow £300k.
Buy house for £150k, spend £50k on it.
Market tanks you can only sell it for £175k.
Then what?
You have £275k (minus transaction fees) to pay back £300k plus interest and no income.
In the olden days "property always went up", but I think a few institutions have got stung on that assumption.
jdw1234 said:
You have no income.
You borrow £300k.
Buy house for £150k, spend £50k on it.
Market tanks you can only sell it for £175k.
Then what?
You have £275k (minus transaction fees) to pay back £300k plus interest and no income.
In the olden days "property always went up", but I think a few institutions have got stung on that assumption.
Technically not borrow as such as if its an offset he can do what he wants with it, but I think they will get wind of what he is going moving to an offset mortgage when he owns his own home and is trying to release asset that he has no/limited income on and will refuse.You borrow £300k.
Buy house for £150k, spend £50k on it.
Market tanks you can only sell it for £175k.
Then what?
You have £275k (minus transaction fees) to pay back £300k plus interest and no income.
In the olden days "property always went up", but I think a few institutions have got stung on that assumption.
This is what high risk is and what quite a few people fell foul on when the market tanked the first time, borrowing against the home to make money on property and it going tits up.
I can see the only lenders agreeing to this wanting something stupid like 10% interest rates which would negate the fact OP should even bother.
Or the OP could down size to a £300k property and its all his own money to do with as he pleases.
jdw1234 said:
You have no income.
You borrow £300k.
Buy house for £150k, spend £50k on it.
Market tanks you can only sell it for £175k.
Then what?
You have £275k (minus transaction fees) to pay back £300k plus interest and no income.
In the olden days "property always went up", but I think a few institutions have got stung on that assumption.
Same as what happens to any business trade through it or go bust, although in my case I'd sell a few toys.You borrow £300k.
Buy house for £150k, spend £50k on it.
Market tanks you can only sell it for £175k.
Then what?
You have £275k (minus transaction fees) to pay back £300k plus interest and no income.
In the olden days "property always went up", but I think a few institutions have got stung on that assumption.
However its never happened yet.
I'm a pessamist and wait and only buy sure things.
Currently I'm building a new house but because I'm building it rather than buying it I can't port my Mortgage hence I'll be left with a house, owned with no mortage and no easy way to get one.
Try this company http://www.stirlingpartners.com/ . Speak to Danny (He has seen this post and may be able to help).
Jon
Jon
redgriff500 said:
Same as what happens to any business trade through it or go bust, although in my case I'd sell a few toys.
However its never happened yet.
I'm a pessamist and wait and only buy sure things.
Currently I'm building a new house but because I'm building it rather than buying it I can't port my Mortgage hence I'll be left with a house, owned with no mortage and no easy way to get one.
feel free to PM I may be able to help.However its never happened yet.
I'm a pessamist and wait and only buy sure things.
Currently I'm building a new house but because I'm building it rather than buying it I can't port my Mortgage hence I'll be left with a house, owned with no mortage and no easy way to get one.
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