Converting residential mortgage to Buy-to-Let

karenbarnett · 28 March 2011 at 5:58PM

Please help!
My husband and I are emigrating, and want to let out our flat rather than sell in this market.

When calling our existing lender (Halifax) we were told that, as we had come off our fixed rate and were now on the variable, we'd need to convert to a Buy-to-Let rate and provided quotations.
I've also looked elsewhere for a better option (through a broker) - the best being with The Mortgage Works - but the fees that go along with this are astronomical...

I'm not just talking about the 2.5% arrangement fee, but the Valuation fee at £390, plus conveyancing fees (I've been quoted £499).

Is it just me, or are these fees ridiculous? I'd always thought a valuation was £150...
Are there other 'hidden' fees that I dont know about? What have other people paid?

Any advice anyone can give me would be amazing.

Thanks

storn · 28 March 2011 at 6:05PM

Times have changed I am afraid, nowadays is far more expensive......On my residential mortgage I had to pay £380 and also there will be over £1000 added to mortgage and £180 arrangement fee. Therefore I am not surprised that want much more for a btl.

gingertips · 28 March 2011 at 6:47PM

its the way of the world...banks found a way to screw you over with additional fees that you used to consider part of the mortgage...the £499 is a joke - i would ask for written confirmation of who exactly is performing it & that you get a full copy of it...youre paying for it.

neverdespairgirl · 29 March 2011 at 8:14AM

Lloyds, I notice, have a valuation fee of £700-odd quid and a full survey fee of £2,500! For our type of property, anyway

angrypirate · 29 March 2011 at 9:57AM

Thats before you start to talk of void periods, repairs, tenants who dont pay rent, useless estate agents etc etc.

karenbarnett · 29 March 2011 at 4:24PM

It's a sad state of affairs when the lenders penalise us for low interest rates. Not getting enough from the interest so they charge us ridiculous fees where possible.

angrypirate, it's not an option to sell, as we'd lose a substantial amount of the capital we put in (our property being worth less than it was when we bought) so we're just going to have to risk the other things. Sounds like you've had a bad experience - my mum and best friends are landlords and have never experienced those things (well, except repairs but those would happen even if you were living there)

GuidoT · 29 March 2011 at 4:42PM

Lenders do not like to BTL much and those that do now charge large arrangement fees and high rates.

I had one lender who wanted to charge me £3K in arrangement fees (on a £140K mortgage) with a rubbish rate.

I remember 5 or so years ago when C&G did not differentiate between BTL and normal residential mortgages for the purpose of fees and rates (but they would only let you have one BTL), I still have that one on a SVR of I think 2.5%.

Brb · 29 March 2011 at 4:45PM

Also ensure you have your tax position sorted before you go. Google non resident landlord. You may be able to get yourself exempt but has to be done before you emigrate/rent out property.

There are other expenses too. Gas safety check, epc etc. Ensure you get a good LA as a bad one could (worst case scenario) see you in prison.

karenbarnett · 29 March 2011 at 5:08PM

Brb wrote: »

Also ensure you have your tax position sorted before you go. Google non resident landlord. You may be able to get yourself exempt but has to be done before you emigrate/rent out property.

There are other expenses too. Gas safety check, epc etc. Ensure you get a good LA as a bad one could (worst case scenario) see you in prison.

Thanks, we have taken all of these things into conideration. My mum, a landlord herself, will be looking after it, so saving us that issue which is good!

Have just called our existing lender again about changing our existing mortgage to consent to let - the rate isnt as good as BTLs elsewhere but they said I can extend the term to keep repayments down. No valuations, no conveyancing/legal fees. This may be the way we go... what a total mindfield! :mad:

Brb · 29 March 2011 at 5:32PM

Don't lose sight of why you're doing it though

fulfilling a long dreamt dream living in a far flung land ... ?

Gilea22 · 17 April 2012 at 2:46PM

I went to the Halifax and said I would be renting out my house after 7 years as a residential owner and they said I had to remortgage and the costs were over £1k for each offer they gave me plus it was 3 point above my present mortgage. It was said on a take it or leave it basis as I explained I would be paying more monies than I did on my present mortgage over and above the rent and insurance I would be taking out.
Other lenders are not so good and I agree "The Mortgage Works" offer does seem to be the best on a remortgage but again your fees which could be added to the mortgage are very high.
The banks borrow at a ridiculously small interest rate and then screw their clients espicially as the government own a huge share of the Halifax!!
Anybody got any good ideas:(

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Converting residential mortgage to Buy-to-Let

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