BTL Mortgage Adv

superM · 17 October 2016 at 9:00PM

Hi,

We have seen a property which is for 220k.

My other half currently has a property rented out with rental income of £450pm. This property has no mortgage. She started to rent this property out in July 2015 and ts worth 140k.

My income is 20k. My otherhalf is not employed. She is a carer for an disabled child.

We would like to raise 80k from existing property + 25k from our savings and put 105k against new property. Obtain a BTL mortgage for 115k to cover new property.

We are living with parents.

Is this possible and which bank likely to help?

Thanks

meemawuk · 18 October 2016 at 9:57AM

I would phone London and Country, but you're basically asking for a 200k mortgage based on a single income of 20k (+rental income assuming you can evidence this over I think 2 years). It seems like quite a big ask.

Even if you can evidence that the rental income would cover 125% of the mortgage repayments on an 80k mortgage (which I expect you'd want to have on interest only) and could find lenders where having a buy to let isn't a problem, you're still looking for a mortgage of 115k on a single income of 20k which is quite a stretch.

Not to mention stamp duty will run you st around 8k before all the usual other fees. Have you budgeted that?

ACG · 18 October 2016 at 10:17AM

Not impossible but it is a tough ask.

Most lenders need all ofthe following:
£25k income.
Home owner
Over the age of 21/25

With 2 of those missing it it reduces your pool of lenders a fair bit.

I was also going to mention you will have to pay the increased stamp duty so its worth checking that. You will likely need a broker as I do not think it is one for the high street.

superM · 18 October 2016 at 8:53PM

Thanks for replying back.

I have set aside money for stamp duty.

Has anyone got experiance with Natwest?

I have spoken with them and the income requirement they have is 20k. They assess on residential mortgage first of all but they take into account PAYE income + benefits CTC, CB, DLA and carers allowance.

And then go ahead with rental income criteria. I am expecting £700pm rent on 115k mortgage.

ACG · 18 October 2016 at 9:37PM

According to Natwests lending guide, their minimum income is £25k.
http://intermediary.natwest.com/downloads/natwest/NatWestLendingGuide.pdf - Page 7

superM · 18 October 2016 at 10:32PM

ACG wrote: »

According to Natwests lending guide, their minimum income is £25k.
http://intermediary.natwest.com/downloads/natwest/NatWestLendingGuide.pdf - Page 7

Ok the Natwest Mortgage line did say 20k to me. I rang them twice and had the same response from two diffirent people.

From your experiance are there any lenders who accepts mortgage with 20k income. The rent will be 125% of of the mortgage repayment.

Thanks

tlc678910 · 20 October 2016 at 8:43PM

Hi OP,

Just checking you noticed the advice given was flagging up additional rather than ordinary stamp duty (an extra 3% on top of ordinary stamp duty as it will be a second property).

Why not just sell the rental and get an 80K mortgage to buy your property? Can you really keep up payments on both mortgages if your rental is vacant/not paying? I can see why a lender would be sceptical that you could do this.

Tlc

superM · 28 October 2016 at 7:43PM

tlc678910 wrote: »

Hi OP,

Just checking you noticed the advice given was flagging up additional rather than ordinary stamp duty (an extra 3% on top of ordinary stamp duty as it will be a second property).

Why not just sell the rental and get an 80K mortgage to buy your property? Can you really keep up payments on both mortgages if your rental is vacant/not paying? I can see why a lender would be sceptical that you could do this.

Tlc

I have the money available for the stamp duty. I will continue to live with parents - they are elderly 80 yrs and I don't want to leave them on there own.

If the both properties are vacant I am 100% I can manage the mortgage payments. Currently I have 1kpm left end of the month.

I have spoken with Natwest again and they told me again its 20k. When I mentioned brokers and Natwest intermediary website is showing 25k. They told that is correct - If I go through broker then income requirement is 25k. If I apply directly with Natwest then requirement is 20k.

amnblog · 28 October 2016 at 9:44PM

Nat West cap your lending at 4.99 x times income anyway - so it won't work.

What you suggest is very tricky and you should use a broker.

superM · 28 October 2016 at 10:50PM

amnblog wrote: »

Nat West cap your lending at 4.99 x times income anyway - so it won't work.

What you suggest is very tricky and you should use a broker.

Yes but they also take into account other income example Tax credits and DLA.

I went through Natwest AIP on Natwest website which carries out an soft search and came AIP upto 117k.

Skippity · 29 October 2016 at 2:36AM

I have been looking at a house that is going to auction to purchase a buy to let property. I am getting a re-mortgage on another property I own. My mortgage adviser has told me the lender wont lend on the house that I want to purchase at auction and has valued it at worth nothing. The lender says that this is because the house doesn't have central heating, needs re-wiring, and has polystyrene tiles on some of the ceilings. That's why its going to auction, because it needs work doing to it. But I have been told because its a buy to let, even when purchasing at auction it needs to be immediately habitable to get a mortgage lender to lend on it.

I have explained that I was going to use some of the money from the re-mortgage to do the property up and also to cover the mortgage payments while it is being done up, but they are still saying no.

This has left me in a difficult position, as if I buy the property cash, I will struggle to do the property up. Depending on what it goes for, i might not even have enough money to pay the stamp duty and solicitors after purchase.

Any advice would be helpful.

Many thanks.
From Skippity

BTL Mortgage Adv

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