2nd Mortgage - Deposit

Saints_1877

Hi All,

First time post, but been reading the forums for a long time.

I'm currently in the process of buying a new flat. I have a 10% deposit to put down on this.

I also have my first flat which I rent out (39k to pay on this mortgage).

Most of the mortgage providers I speak to are looking for a 15% deposit, due to the fact I have another property with mortgage on it.

Is there any providers out there which will look at me with a 10% despoit or less on a 2nd property - and of coruse still give me a good interest rate :-)

All advice appreciated.

dwight-van-man

Hi, if you have the first flat that you rent out on a buy to let mortgage then you should have no problems getting a 90% loan on the new place. Alternatively, get consent to let from the current lender and again, this should allow for a 90% mortgage, albiet possibly with a requirement for proof of the rental you receive. As an example, not advice, Northern Rock will allow you access to their full product range, including Together, as long as you have consent to let and are abale to evidence the rental you recieve, either by way of bank statements or an AST if currently let, or from letting agents comparables if you are about to let it. I would imagine there will be other will work on a similar basis. Speak to a mortgage broker, they'll know who best to approach for your circumstances.

HelpWhereIcan

Quick answer is yes. What you may need is a lender who will do 'let to buy'.

Each lender's policy will be different and I would argue that this is an area in which you would need advice.

In general, most lenders that accept 'let to buy' will want to know that the amount you could rent your existing property out for will be up to 130% of your exisiting mortgage (although some will be happy as long as the mortgage will be covered). This can be a problem if you do not have a lot of equity and a repayment mortgage as it can mean that the rental income is short of the required amount. However, this can be mitigated by switching to interest only if your current lender allows it. Some lenders will want the rental income to be confirmed by a surveyor while others will be happy to have an ARLA letting agent confirm it.

Some lenders will insist that you remortgage your current property onto a buy to let with them as well as taking the mortgage on the new house with them, but this can be more expensive than having the whole of the market to choose from for your new mortgage and your buy to let.

Is the mortgage on the flat a formal 'buy to let' mortgage? If so, there are lenders who will ignore it as long as it can be evidenced that it is a 'self funding buy to let', even though they may not do 'let to buy'.

Because of the myriad of potential solutions, I would say to get advice and to choose a whole of market adviser preferably through reccomendations from family and friends. Failing that, speak with a couple of firms, making sure to ask the questions that Martins suggests in

http://www.moneysavingexpert.com/cgi...01649966,86816,

Hope this helps

Saints_1877

Thanks for the swift replies on the subject.

Regarding the rental on the current property - It's getting more than the 130% of monthly repayment on the mortgage. For the mortgage on the rented flat I have been given "consent" by the provider (A&L) to rent the property out, so good on that front too.

I'll definitely be looking to speak to a mortgage broker, over this so will do some invertigation into who is best on that front tonight :-) I couldn't get the link to work though....is it just me?

Again thanks for the advice.

HelpWhereIcan

Whoops, sorry, should have been

http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1101649966,86816#2

herbiesjp

Agree with HWIC

I believe that getting consent to let as you have done will be the best option for you. As the rental income is gretaer than 130% of the mortgage payment this liability in the background will be "ignored". A lender will then be able to agree the new mortgage for you based on using a 100% of your income (provided you have no other debts in the background)

Have a word with a whole of market adviser and they will be able to help

HTH