The Lemon Fool

mc2fool wrote:BTW, just out of curiosity I stuck the sum of my pensions (being what I reckon mortgage lenders would consider as reliable income) into a mortgage borrowing calculator and it looks like I could only borrow half of what I'd need, so it looks like I wouldn't be eligible anyway....

Now this has interested me, so 'scuse the off topic aside but I guess you have ISA income? Why wouldn't it be considered? Do the applications not have a consideration of other incomes. My quick google suggests yes though only variously possible with some conditions.
Anyhow as you don't want a mortgage I'll guess you don't need to explore further.

kempiejon wrote:

mc2fool wrote:BTW, just out of curiosity I stuck the sum of my pensions (being what I reckon mortgage lenders would consider as reliable income) into a mortgage borrowing calculator and it looks like I could only borrow half of what I'd need, so it looks like I wouldn't be eligible anyway....

Now this has interested me, so 'scuse the off topic aside but I guess you have ISA income? Why wouldn't it be considered? Do the applications not have a consideration of other incomes. My quick google suggests yes though only variously possible with some conditions.
Anyhow as you don't want a mortgage I'll guess you don't need to explore further.

As it happens I don't take any income from any of my investments, ISA, SIPP or otherwise, but I was just guessing at what lenders would be willing to count or not even if I did, so do DYOR.

kempiejon wrote:

mc2fool wrote:BTW, just out of curiosity I stuck the sum of my pensions (being what I reckon mortgage lenders would consider as reliable income) into a mortgage borrowing calculator and it looks like I could only borrow half of what I'd need, so it looks like I wouldn't be eligible anyway....

Now this has interested me, so 'scuse the off topic aside but I guess you have ISA income? Why wouldn't it be considered? Do the applications not have a consideration of other incomes. My quick google suggests yes though only variously possible with some conditions.
Anyhow as you don't want a mortgage I'll guess you don't need to explore further.

Google found this:

"It’s worth noting that not all lenders will accept investment income when calculating how much you can borrow. Some may only use a percentage of the investment income, while others may not accept it at all. If you are relying on investment income to support your mortgage application, it’s important to speak to a mortgage broker who can help you find a lender that is more likely to approve your application."

https://albionforest.co.uk/articles/7-i ... -mortgage/

It appears to be a "maybe".

kempiejon wrote:

mc2fool wrote:BTW, just out of curiosity I stuck the sum of my pensions (being what I reckon mortgage lenders would consider as reliable income) into a mortgage borrowing calculator and it looks like I could only borrow half of what I'd need, so it looks like I wouldn't be eligible anyway....

Now this has interested me, so 'scuse the off topic aside but I guess you have ISA income? Why wouldn't it be considered? Do the applications not have a consideration of other incomes. My quick google suggests yes though only variously possible with some conditions.
Anyhow as you don't want a mortgage I'll guess you don't need to explore further.

Like mc2fool, I have not had a mortgage or bank loan for a very long time, 26 yeas in my case. But I did look into getting a short-term loan a couple of years ago, when one of my sons had an interesting property opportunity. Two things struck me about the process:

1) Applying for a loan is a lot more complicated and invasive than it used to be. I guess as a result of the GFC and various newer regulations. I really found it irksome given that I easily had the assets to cover the asked amount and it was not a long-term commitment.

2) My ISA and taxable investments would not be considered by the bank, nor the pregnant value of any deferred pensions.

I did not really consider an ISA shuffle, although it seems like a plausible idea. I did consider offloading a lot of taxable positions and paying the CGT. But in the end my son decided not to proceed with the deal anyway.

I think as soon as you are entering non-standard - and I mean by non-standard a situation where the monthly repayments on a mortgage are not going to be financed out of salaried or rental income - then the computer systems of most major lenders will throw a hissy fit.

I'd be looking at using a fee free broker in the first instance - and it could be that be paying a small fee you secure access to a given rate etc for a period of time without the obligation to draw it down should you wish to have that certainty (over and above any timescale normally identified in the offer documentation).

Certainly, my preference in more recent times has been to simply buy property via available cash balances - while from a BTL perspective it might not be tax efficient it helps ensure my £ gearing amount continues to fall relatively quickly. I can't remember who it was but I got turned down for a mortgage on one property because I answered the questions honestly (and the mortgage would have been secured on that property) so I simply increased a mortgage on another property with a different lender (who extended the £ amount on the same rate they had done on the initial loan) and bought outright.

They can but it's unusual it's best to discuss your full situation with a mortgage broker who can choose a provider that might agree

During an application for an interest only mortgage I was questioned about my "all" my income and informed of my investment income mainly sheltered. The girl running through the questioning process was just following a script and I don't think she really knew much herself.

She had to discuss several of my answers with her supervisor. On investments, she came back and asked what they were. Then she came back saying the foreign ones like Fidelity South East Asia didn't count could I list more of the British ones. Vodafone was a yes even though I said it earned worldwide. Eventually there was a list deemed suitable and the total value. This was more than the mortgage and the young lady asked why I even needed a mortgage if I had more in savings.

It nearly failed a couple of times, once on picking a retirement date for the other half but moving the date back a couple of years ticked that box. I was also asked if I wanted to borrow more. I said OK, went through more questions to be told I couldn't have more and why did I need it. I said cos you offered it!

The process took about an hour and wasn't the usual x times working income ratio which is probably the norm. Mine was complicated by other properties and mortgages and by the fact I wasn't earning.

Another issue where I nearly failed the process was to do with difficulties with paying. I couldn't see any scenarios where that could be an issue but they wanted me to say "I would sell the property"

I was doing something similar to you. Moving area and planned to buy first, so as not to be in a chain then sell two properties in the area I was moving from so no need to travel back. I suspect there will be a lot more people in similar circumstances, lots of wealth with a need for short term access to a sizable cash amount but you have to jump through lots of hoops.

kempiejon wrote:

Moderator Message:
Split off from here to keep that topic focused. - Chris

mc2fool wrote:BTW, just out of curiosity I stuck the sum of my pensions (being what I reckon mortgage lenders would consider as reliable income) into a mortgage borrowing calculator and it looks like I could only borrow half of what I'd need, so it looks like I wouldn't be eligible anyway....

Now this has interested me, so 'scuse the off topic aside but I guess you have ISA income? Why wouldn't it be considered? Do the applications not have a consideration of other incomes. My quick google suggests yes though only variously possible with some conditions.
Anyhow as you don't want a mortgage I'll guess you don't need to explore further.

Last time I enquired into this (admittedly, a long time ago), the answer was quite unambiguous. Investment income cannot be taken into account because it is not guaranteed. But then, neither is anyone's employment guaranteed, but they don't seem to mind that risk.

I didn't try other lenders other than standard high street places - and I expect one could be found if necessary.

Arb.

mc2fool wrote: ... but I guess you have ISA income? Why wouldn't it be considered? ...

“Would mortgage lenders count investment income?” Perhaps not all, but certainly ours did, last month. House + pensions + investments (SIPPs & ISAs) + income from them (clearly visible trickling in on the last-3-months’-bank-statements) was quite enough for them to lend at 60% LTV. (“Retirement Interest-Only Fixed-for-Life Remortgage Assisted Legal”.)

TSC