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  • FIRST POST
    • varghesejim
    • By varghesejim 7th Jul 17, 12:51 PM
    • 125Posts
    • 49Thanks
    varghesejim
    Mortgage dilemma
    • #1
    • 7th Jul 17, 12:51 PM
    Mortgage dilemma 7th Jul 17 at 12:51 PM
    We bought our flat in 2015 with a 10percent deposit and 3.44 percent interest(halifax). The fixed rate will expire end of September.

    By realistic estimations according to price paid recently for similar properties our flat value increased so that if we remortgage after September we can increase our equity percent to 25 pc hence a possibility of reducing the interest.

    Here is a problem. My wife got a job away from home so she has to live near to workplace for weekdays. As a family with a small boy this is not sustainable so we decided to move near to her workplace. Now we have to ask consent to let from halifax, assuming they agree we have to rent out our property. However, we don't have an opportunity to reduce the interest even though our equity changed to 25 percent.

    Any advise on the situation? We want to come back to our area in the future so converting to BTL is not an option. Can we remortgage with a consent to let?
Page 1
    • Lokolo
    • By Lokolo 7th Jul 17, 1:32 PM
    • 19,812 Posts
    • 14,861 Thanks
    Lokolo
    • #2
    • 7th Jul 17, 1:32 PM
    • #2
    • 7th Jul 17, 1:32 PM
    Why is converting to a BTL not an option because you will want to return in the future?
    • saajan_12
    • By saajan_12 7th Jul 17, 1:54 PM
    • 953 Posts
    • 648 Thanks
    saajan_12
    • #3
    • 7th Jul 17, 1:54 PM
    • #3
    • 7th Jul 17, 1:54 PM
    How far in the future? It's very inefficient both practically and tax wise, to let a property and rent yourself.
    - Pay tax on rent income but no offset from rent paid
    - Capital Gains Tax accrues on owned property while you don't live there
    - Landlord responsibilities e.g. repairs in another town, extra tenant / LL to liaise with for appointments, deposit protection regulations, hassle of finding tenants, referencing, chasing for rent, inspections etc.

    Might be better to sell and purchase in the new area, and think about moving back nearer the time.

    Anyway, CTL may not work anyway because
    - Many lenders will only give you Consent To Let for upto 12 months after which you'll have to go to BTL.
    - CTL is meant for a change in circumstances during your mortgage. This doesn't really apply if you're remortgaging with the intention of letting relatively soon. So, you'd have to go to BTL anyway, based on the current LTV (ie taking your higher equity into account) but with the higher BTL rates.
    Last edited by saajan_12; 07-07-2017 at 2:02 PM.
    • kingstreet
    • By kingstreet 7th Jul 17, 1:58 PM
    • 32,208 Posts
    • 17,249 Thanks
    kingstreet
    • #4
    • 7th Jul 17, 1:58 PM
    • #4
    • 7th Jul 17, 1:58 PM
    Can we remortgage with a consent to let?
    Originally posted by varghesejim
    No. There is no lender willing to offer a residential product on an existing or to be immediately let property if you are not armed forces personnel being posted.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • Guest101
    • By Guest101 7th Jul 17, 2:04 PM
    • 15,128 Posts
    • 14,763 Thanks
    Guest101
    • #5
    • 7th Jul 17, 2:04 PM
    • #5
    • 7th Jul 17, 2:04 PM
    Why would you not sell?
    • varghesejim
    • By varghesejim 7th Jul 17, 4:42 PM
    • 125 Posts
    • 49 Thanks
    varghesejim
    • #6
    • 7th Jul 17, 4:42 PM
    • #6
    • 7th Jul 17, 4:42 PM
    Why is converting to a BTL not an option because you will want to return in the future?
    Originally posted by Lokolo
    The hassle and tax implications to convert residential to BTL and then vice versa
    • G_M
    • By G_M 7th Jul 17, 4:45 PM
    • 41,890 Posts
    • 48,474 Thanks
    G_M
    • #7
    • 7th Jul 17, 4:45 PM
    • #7
    • 7th Jul 17, 4:45 PM
    Apply to Halifax for CTL.


    * New landlords: advice, information & links

    * Letting agents: how should a landlord select or sack?
    • varghesejim
    • By varghesejim 7th Jul 17, 4:49 PM
    • 125 Posts
    • 49 Thanks
    varghesejim
    • #8
    • 7th Jul 17, 4:49 PM
    • #8
    • 7th Jul 17, 4:49 PM

    Might be better to sell and purchase in the new area, and think about moving back nearer the time.

    .
    Originally posted by saajan_12
    The problem is the current property is in a good area(London commuter belt) which will retain/improve its value pretty much in line with South East property hotspots. Wifes workplace is not that good in that context, so when coming back we might not be able to afford in the current area.
    • dimbo61
    • By dimbo61 7th Jul 17, 4:50 PM
    • 9,539 Posts
    • 5,162 Thanks
    dimbo61
    • #9
    • 7th Jul 17, 4:50 PM
    • #9
    • 7th Jul 17, 4:50 PM
    Is your wife,s new job worth moving to a new area?
    As others have said you would become Landlords with all that involves while at the same time paying someone else Rent every month.
    • varghesejim
    • By varghesejim 7th Jul 17, 4:51 PM
    • 125 Posts
    • 49 Thanks
    varghesejim
    Apply to Halifax for CTL.
    Originally posted by G_M
    Yes, that is the only way it seems( remortgage not looking feasible).
    • DumbMuscle
    • By DumbMuscle 7th Jul 17, 4:53 PM
    • 196 Posts
    • 290 Thanks
    DumbMuscle
    The hassle and tax implications to convert residential to BTL and then vice versa
    Originally posted by varghesejim
    The tax implications are the same either way - the taxman doesn't care what your bank calls your mortgage, only whether you are living in the property or not. The only part of your mortgage the taxman cares about is the interest on it (which is a deductable expense).
    • varghesejim
    • By varghesejim 7th Jul 17, 4:56 PM
    • 125 Posts
    • 49 Thanks
    varghesejim
    Is your wife,s new job worth moving to a new area?
    Originally posted by dimbo61
    Compared to quitting that job, yes we think.
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