My husband and I own a £410,000 house bought last year with no mortgage. We are both self employed but earning under the tax threshold. We are looking to borrow around £45,000 for home improvements.
Is there any way we would be able to borrow the money and use the house as collateral?
I am 32 my husband is 51 so I don't think we qualify for equity release.
Ask the Specialist response:
Thanks Lucy for the enquiry.
There is good and bad news.
The bad news, as you rightly say, is that you would be unlikely to qualify for equity release.
There are a couple of lenders we work with who would offer a short term mortgage (typically 1 to 2 years) where they would add interest onto the mortgage itself. However, their interest rates are typically around 6% and they would want a clear demonstration as to how the mortgage would be repaid in 1 to 2 years time.
On a standard long term mortgage, lenders are duty bound to evidence income to demonstrate any mortgage they grant is affordable.
The good news is that lenders do have the ability to consider different forms of proving your income, whether that be contracts, tax returns, invoices, accountants references etc.
Another alternative maybe in the form of a Guarantor whereby they would guarantee the mortgage payments would be met should you fail to do so.
I would certainly give one of our advisers a call on 020 77 100 400 to discuss your situation for 10 to 15 minutes. They should then be able to let you know if it would be possible to arrange a mortgage for you.