Buy to let help!!!

mort1

My girlfriend bought a house with her ex a few years ago, they split up shortly after buying the house but have been unable to sell. 12 months ago they made the decision to rent out the property. My girlfriend contacted the mortgage company, explained the situation and the company put them on a fixed rate fee of 7.5% until the initial 3 year deal finished. That deal is due to finish in Sep 09, at which point the payments for the house will revert to the standard loan rate of 8.5%.

Her ex has decided that if the property is not off his hands by Sep 09 he will stop paying his half of the mortgage.

Therefore we are looking at ways of taking on the property together on a buy to let deal. Unfortunately the property has depreciated in value so in Sep it will have an estimated value of £96,000, which is the total mortgage amount required, therefore a LTV of 0%, which is not very attractive to the banking industry these days.

The mortgage company will not carry out a transfer of equity as they class this as a new deal and there is not enough equity in the house to qualify for the buy to let on a new deal.

I have explored every option I can think of and exhausted my friends and colleagues levels of knowledge on the subject. I could use with any ideas/tips/suggestions that anyone has…….:eek:Please help!

happybroker

from what you have posted I guess the lender is of the "sub prime" variety. Your partners ex needs to have it explained to him that if he stps paying the mortgage he is still liable for it and that he will damage his credit rating.

Your partner needs to make sure the bank have his contact details and address also so that they can chase him for payment should the mortgage go into arrears.

You won't get a buy to let deal at 100% ltv, 75% is the best there is out there. Can the property not be let again whist being marketed for sale?

Conrad

Your only option aprat from selling is to remortgage to a new lender in your joint names, but this can only be considered if;

1) You both have clean credit and no missed mortgage payments

2) You stick in at least a 10% deposit.


Note if her ex stops paying, your partner is 100% liable for payment as is the ex.

Any missed or reduced payments will decimate your partners score regardless of anything the lender tells your partner.

No part of a mortgage contract says anything along the lines of - "dont worry, each applicant is only 50% liable"

silvercar

Can't you and your girlfriend move in to the property and live there. Doesn't matter that the ex is still on the deeds, doesn't stop your girlfriend living in it with a new partner.

mort1

Thanks for the replies really appreciate your advise, unfortunately:

1) They have been trying to sell since they split but has been no real interest.

2) We now live and work 400 miles from where the "problem" house is so not an option to move in.

3) Her ex does not care about credit rating......

4) I have just bought my own place and therefore cannot raise the 10% deposit to assist her as I have just sunk my savings into my new house.

Thanks again for trying any other tips would be greatly received.