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Remortgage

Jever
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Remortgage

#119648

Postby Jever » February 22nd, 2018, 11:12 am

Hi all,

I own my home outright and have been thinking about taking out a mortgage against my own home so that I could buy myself another house as a project. Depending on what I buy, I might refurb and resell, let it to a tenant or let it for short-term holiday rentals.

I'm looking to borrow less that 30% of the value of my main home, so I don't see any significant risk to the bank.

However, when I called my bank to ask about what they could offer, they wanted the usual salary etc. information, but they also wanted a lot more information on what I want the money for and how I will pay the council tax on the additional property if I can't let it.

What I really want to do is have an amount of money available to draw on (just in case I go to an auction or want to act quickly on something I see) that's secured on my existing home, without having to jump through a load of hoops once I've identified a target. This simply isn't possible with my bank.

Does anyone here know of a lender that would offer borrowings, based on adequate cover from the equity of the existing home alone?

Thanks in advance

Jever

skewwy
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Re: Remortgage

#119649

Postby skewwy » February 22nd, 2018, 11:15 am

I'm guessing you have not taken a mortgage out since 2008? :D

Lootman
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Re: Remortgage

#119657

Postby Lootman » February 22nd, 2018, 11:32 am

Jever wrote:when I called my bank to ask about what they could offer, they wanted the usual salary etc. information, but they also wanted a lot more information on what I want the money for and how I will pay the council tax on the additional property if I can't let it.

It is my view that if you are borrowing less than 50% of the asset then you should not need to provide anything more. The bank simply takes a charge against your property and, if you default, can repossess the property. I refuse to deal with banks that provide such meddlesome and invasive procedures.

However, like you, a couple of years ago I was presented with a property opportunity. I could have cashed in shares but that would have meant paying CGT. I could have cashed in some of my ISA tax-free but that seemed like a waste. So I went to the bank, and got the invasive crap that you did.

The one thing they offered me, oddly in some ways, was an unsecured loan. The bank seemed happier to lean with no collateral at all. Bizarre. But it was a higher interest rate and would have to be repaid after five years (although perhaps you could roll it over into a new loan?).

A second possibility is some kind of margin loan against the shares in a brokerage account. Not sure which brokers offer that, however, and it may not be possible with an ISA or SIPP.

Lastly, a mortgage broker who specialises in commercial mortgages and properties may be more flexible.

I hate all banks.

Jever
Posts: 8
Joined: November 4th, 2016, 8:34 pm
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Re: Remortgage

#119682

Postby Jever » February 22nd, 2018, 1:43 pm

Hi,

Yes, you're right, I think the last time I took out a mortgage in the UK was 1997.

I agree entirely with Lootman though, if the borrowings are covered twice or more by collateral, there's no valid reason for the lender to need more.

Anyway, I'm thinking about speaking to a mortgage broker - anyone here have a recommendation?

Regards

Jever

Pastcaring
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Re: Remortgage

#120281

Postby Pastcaring » February 25th, 2018, 11:32 am

Hi Jever

I don't live in the UK so I am probably doing the wrong thing ,but,would your age have anything to do with it.

Down under here banks have become very risk averse since the GFC,but risk averse in a strange way.If I was young and working,they would lend me money no problem.

However I am old and retired.I had to roll over a mortgage on an investment property from fixed interest to variable.Over the phone did the income assets thing.The mortgage was around 15% of the value of the house.The mortgage would carry on at $600 fortnightly and be cleared in 2 years roughly.I would put the required amount into an offset account.So no interest to pay.Wonderful,where do I work for proof of wages.

I don't, said I,income is derived from dividends and rent.Panic,never dealt with a mortgage like that before,will have to pass it on to somebody higher up the chain,they will call me back.

Nobody called back after a week so I just told them take the money from the money that would have gone into the offset account and pay the mortgage off.

From what I can gather they were terrified in case it ended up 'bank takes house off old couple ' headlines in the paper.Thare was no chance that that would happen.At their next AGM I collared the director that was head of the risk commitee,explained,he apologised.He did say he could see the point of why the loan was turned down.I could see that point,it was just ridiculous.So we agreed to leave it at that .

Possibly it is just age .My margin lender here is beginning to take the same attitude.Running at around 80% equity they are getting a bit risk averse.

However the RBA here is trying to pull back on lending ,so I can fully understand why they would rather lend to them than me,for that good on them,the kids need it more than I do.

Possibly just age and govt policy?.


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