buy to let mortgage to repay equity release company

orangemoose88

Hi,

I have recently inherited a house which has had equity release taken out against it. Having spoken to a solicitor, the amount that needs paid within one year to the equity release company is around £22,000. The house itself is valued at around £180,000. I don't want to sell the house, but I don't have the cash to pay the equity release people. The estate also has around £10,000 of debts which will need to come out of the value of the house, making the total mortgage I'd need around £32,000. I'd be looking for the mortgage on a buy-to-let basis, but I don't know how easy this will be. I'm 21 and I currently have no income (student). Does anyone have experience of a similar situation, or can you recommend any mortgage deals you have seen? Obviously I've never given any thought to mortgages so I don't know anything about them. Are there any issues I should be aware of?

Thanks.

Leon_W

Common sense tells me that you should probably sell and bank the cash, but that wasn't what you asked.

I can think of one or two lenders who MIGHT be able to help, but apart from them it'll be near on impossible.

Most lenders require a minimum income so you can forget those. A lot of them won't take business from FTBs, so those are out the window, and as the number of lenders actually active and seeking business in this area is very low then your options run out pretty quickly.

Get the help of a recommended broker who knows his/her stuff as many Buy to Let companies wont deal directly with the public anyway.

Best of Luck.

orangemoose88

Ok, thanks so much for the advice. Can I just ask why you think I ought to sell? Also, how can I find a good mortgage broker? Which lenders do you think will be able to help?
I don't really know anything about this sort of thing so any advice is much appreciated.

theartfullodger

Also, how can I find a good mortgage broker?

There are no good mortgage brokers...

Call 3 of them discuss your situation & decide which one sounds most honest & trustworthy.. go with him...

Cheers!

Lodger

Cannon_Fodder

I'd guess the suggestion to sell is based on your absence of income and a requirement for £32,000 in cash in the near future.

Can you raise the valuation fee and mortgage arrangement fee, without an income? Let alone pay some months of mortgage while getting a tenant?

Can you fulfill the responsiblilties of being a landlord, reliably, to ensure a tenant pays rent to cover your mortgage, to avoid repossession? (wouldn't it be sad for a £180k house to be repossessed a year from now for want of £32k..?)

Is the property in a rentable condition, or will other expenditure be needed to get it in a presentable condition?

I understand its tempting to keep what someone gifted to you, out of respect for their wishes, or because of sentimental value, etc.

But BTL mortgages are a business venture. Most businesses require startup capital, at least. Not having an income (nor savings, presumably as you haven't mentioned any) precludes you from 'starting up', it appears.

luckyfool

Do you have a parent or close family member with a personal income who can go on the buy to let mortgage on a joint basis with you?

orangemoose88

Thanks all for your help. I'll try and think through all the issues and decide what's the best course of action. It looks like selling might be the best decision. But thankyou everyone for the advice, I'm kind of clueless right now.

theartfullodger

(No offence but..) If you're clueless right now you are very vulnerable to crooks & cheats... take some time or get some more advice (Solicitor who knows what he's talking about - many don't, friends... )