Buy to let help

LollySaver

Hi, I'm having trouble selling my flat & have missived on a new property. I am considering changing the mortgage on the current flat to a buy to let to avoid selling in this market -can anyone help me find a deal that would work for me?
New purchase price £280k
Current flat value in region of £160k with £50 equity in it. I dont think we could achieve more than £600 per month rental & i cant find a lender that would be prepared to lend on that figure.

thanks in advance.

happybroker

consider let to buy on the new mortgage, lenders will consider 90% ltv on that one and some will only take the shortfall between your mortgage payment and the rental income into account for affordability. You will obviously have to seek the consent of your existing provider for the let.

Good advice from an experienced whole of market broker will probably be useful to you.

Good luck

LollySaver

Hey, thanks for the reply happybroker. Not sure what you mean, is it the new mortgage that is a let to buy mortgage? havent heard about that before, i've already applied for a mortgage for the new one with RBS, perhaps this is something they do? then we ask current lender to ok us to let the property? sorry, new to all this!

herbiesjp

A let to buy is a residential mortgage on the new property

A BTL is on the let out property.

If you are going to stay with your current lender and let out the first property, you need to tell them and get consent to let

If you are looking to sell, make sure you are not teid in to any long term deals with penalties.

This would appear to be the cheapest and easiest way of doing it - mind you, there are no guarantees that your current lender will agree that for you.

Make sure you find out from RBS if they are OK with the secenario before you go spending money on fees and valuations, if they will not agree your scenario for you.

happybroker

herbiesjp wrote: »

A let to buy is a residential mortgage on the new property

A BTL is on the let out property.

If you are going to stay with your current lender and let out the first property, you need to tell them and get consent to let

If you are looking to sell, make sure you are not teid in to any long term deals with penalties.

This would appear to be the cheapest and easiest way of doing it - mind you, there are no guarantees that your current lender will agree that for you.

Make sure you find out from RBS if they are OK with the secenario before you go spending money on fees and valuations, if they will not agree your scenario for you.

....what he said.......Good luck

poppy10_2

Most lenders require 125% rental cover though - your rental income needs to be 125% of the mortgage payments. And on your figures, that's simply not attainable.

herbiesjp

If there is not 125% cover (this will depend on the lender) the lenders will treat the deficit as a commitment, and as long as the income is sufficient they will be happy to proceed - on a Let to Buy basis that is

On a BTL basis there are different levels of cover, not only 125%

LollySaver

Hey all, thanks for the replies. Herbiesjp - which lenders offer different levels of cover? all i've seen is the 125% and we cant achieve that. Thanks for your help. no idea what we're going to do at the moment!

herbiesjp

Even with the lowest rental coverage I doubt you will achieve the rental cover need based on those figures

Have you got the deposit already set aside for the new purchase?

dunstonh

all i've seen is the 125% and we cant achieve that.

If you cannot achieve that then you do have to question the qualify of the buy to let investment. Its one of the reasons why these limits now exist.

LollySaver

Hi, we're just looking to avoid selling our flat as we're struggling in this market, trying to find an alternative. We dont have the deposit for the new property as we planned to use the equity from the sale. Looks like we may have to go into open bridging if we complete on the purchase - if that is even available. Starting to get really worried now!