How likely is this - mortgage question...

jenny74

There are a couple interested in our house. They have a house at the moment that they want to rent it out to a family member.

They have told our EA that they want to remortgage their current house on BTL mortgage and in doing so raise a deposit for our house to get a mortage to buy it.

In this market, it all sounds a bit unlikely. Is there anyone with more mortgage know-how than me that can give their advise/opinions, please? (We don't have a mortgage at the moment and also know nothing about BTL mortgages).

Thanks.

Jenny.

stevetodd

jenny74 wrote: »

There are a couple interested in our house. They have a house at the moment that they want to rent it out to a family member.

They have told our EA that they want to remortgage their current house on BTL mortgage and in doing so raise a deposit for our house to get a mortage to buy it.

In this market, it all sounds a bit unlikely. Is there anyone with more mortgage know-how than me that can give their advise/opinions, please? (We don't have a mortgage at the moment and also know nothing about BTL mortgages).

Thanks.

Jenny.

Although BTL mortgages have been cut back, they do still exist. Subject to values and %'s etc stacking up this is perfectly feasible, and I can see why they are doing this. They don't want to wait ages to sell it and also take a hit on the price they sell at (thinking that they wouldn't mind hanging on to it as a LONG TERM investment) and the loan on the bTL is tax deductable whereas it would not be on the loan for the house they live in.

jenny74

stevetodd wrote: »

Although BTL mortgages have been cut back, they do still exist. Subject to values and %'s etc stacking up this is perfectly feasible, and I can see why they are doing this. They don't want to wait ages to sell it and also take a hit on the price they sell at (thinking that they wouldn't mind hanging on to it as a LONG TERM investment) and the loan on the bTL is tax deductable whereas it would not be on the loan for the house they live in.

Thanks for that. My EA told me that the couple are going in to see them on Monday to speak to their mortgage adviser. The lady said that they don't want to sell their original house.

Well we'll see what happens. Thanks for your advice.

PasturesNew

It would be possible, but it's all down to the maths which you can't tell us.

How much they earn -v- the size of mortgage they want on your house is a major part of the calculation. But the mortgage company will ask where the deposit is coming from, which might open up issues.

You'll just have to see, but in the meantime pretend it's not happening so it's a nice surprise if they do get it approved.

The concept of what they are doing isn't the issue, it's just that sometimes when people have these sort of ideas they are living in La La Land when it comes to the actual number crunching.

Good luck!

sarkin

This is what people do when they cant sell thier house, but you are not aloud to rent to relatives so they will have to lie for that bit.

Premier_2

sarkin wrote: »

This is what people do when they cant sell thier house, but you are not aloud to rent to relatives so they will have to lie for that bit.

Who says someone is not allowed to let their property to relatives?
I've never seen such a clause in a BTL mortgage loan agreement? There may be the odd lender which stipulates this but most don't afaik. The usual condition is that the property is let under an ASTA and sometimes that the ASTA must not be for a fixed period exceeding 12 months.

Mutton_Geoff

you are not aloud to rent to relatives

You are allowed to rent to whoever you like. Makes sense to still have an inventory and official AST agreement in place.