Does this have to be BTL mortgage?

Any

Hi everyone,

Right, this is the situation:

My brother and I each have a house (mortgaged), however ours is mortgaged in my husband's name currently (don't know whether that makes any difference when applying).

My father is renting an apartment in Scotland at the moment but the apartment is going to be sold soon so we need to find new place for him to live (he cannot take mortgage himself at all). My brother found an apartment, which he put an offer for and won (in Scotland they have envelope system). However he just found out that the broker he was using and who said he can get 90% mortgage wants £2k in fees (for 40k property!!). So now we have to find mortgage provider ourselves.

The question is, are we asking for BTL mortgage because it is our father who is going to live there? Would we have better chances of obtaining a mortgage if I apply for it rather then brother because effectively I do not have any existent mortgage in my sole name (I earn £23k pa)? Or can we apply for it in our joint names, would that give us better chance?

Sorry this is all a bit new to us (even though brother already has a house his mortgage was sorted via his solicitors who he used to sort the house out as they had free mortgage advisor as part of the service and they do not offer this any more). I have read Martin's articles about mortgages on here and am thinking of using London & Country mortgages brokers, but first I would like to know what am I actually asking them to do for us.

Thank you for reading

new_home_owner_3

its only a small amount cant you remortgage on your current mortgage add 40,000 and just pay the other house staraight off.
Or just get a mortgage yourself dirct from a bank, what deposit have you got?

Plus i dont think you can rent to parents, but you will have to check that out.

Any

I could remortgage our house yes, my OH already said. However this was supposed to be my brother's deal. I don't think my brother has enough equity in the house yet.

We can only put together 10% deposit and my bank does not do 90% mortgage (Nationwide).

My brother I think banks with RBS and it was RBS who that broker said would most likely lend him the money. Brother is going to get a meeting with them.

But I would like to have a back up plan.

So if my father is going to live there it wouldn't count as BTL mortgage? Can you have 2 houses just for yourself? I mean would the bank not question it or anything? It is much more difficult to get BTL mortgage so if it doesn't have to be BTL it would be better.

new_home_owner_3

take a look here nationwide are doing 90% mortgages

http://www.nationwide.co.uk/mortgages/default.htm

Any

new_home_owner wrote: »

take a look here nationwide are doing 90% mortgages

http://www.nationwide.co.uk/mortgages/default.htm

Oh thanks! I looked just last week and couldn't find 90% from them. So that will be probably the back up plan, if he cannot get one himself.

What constitute as BTL, anyone has any answer? If we can prove we can cover the repayments, can we avoid BTL mortgage?
Or is it every morgage if you don't live in the house yourself?

new_home_owner_3

Im going to be jumped on here, but what you could do is remortgage you house or your brothers for the 40,000 pound for household improvements, then when the money has cleared just pay for the house cash.

Then there will be no btl mortgage and the bank will not ask for proof of the house improvements, i done something very similar to get a deposit for my second house.

Any

As I said, we could remortgage our house but that would bring our mortgage to something like 80-85% LTV so we wouldn't get fantastic deal on near to £200k mortgage... In long term that would cost lots of money.

This would be the last resort.

Also I am here only to help my brother out a bit, the whole idea was his and he wants to own the apartment. He would really only accept me into the deal as the last resort.

new_home_owner_3

why dont you borrow 18000 pound each, if your brother has enough equity he should just do it himself remortgage is own house with a added 36000 for improvements, then add your 4000 pound and buy the apartment with cash.

This way you will avoid a btl mortgage and to be honest the payments on top for that would not be a lot at all.

What are your brothers circumstances?

new_home_owner_3

Any wrote: »

As I said, we could remortgage our house but that would bring our mortgage to something like 80-85% LTV so we wouldn't get fantastic deal on near to £200k mortgage... In long term that would cost lots of money.

This would be the last resort.

Also I am here only to help my brother out a bit, the whole idea was his and he wants to own the apartment. He would really only accept me into the deal as the last resort.

plus if borrow more for house improvemnets only the extra would be borrowed at the new rate, your existing mortgage would stay on the rate it currently is on, you can even borrow it on a different term.

Any

Our current mortgage deal is ending in May so we will be looking at new deal again and then we would be looking at the whole amount, no?

I don't think my brother has much equity in his house... Not sure about the exact circumstances, but I think he cannot have more then £15k equity in his house which again is some 85% LTV already.

We would probably have to do something along the lines as you suggest to avoid BTL mortgage, but noone yet confirmed that it has to be BTL mortgage?

He is coming down from Scotland tonight and we are going to discuss it all in detail, but first I wanted to know where we stand, what are we actually looking for.

new_home_owner_3

Any wrote: »

Our current mortgage deal is ending in May so we will be looking at new deal again and then we would be looking at the whole amount, no?

I don't think my brother has much equity in his house... Not sure about the exact circumstances, but I think he cannot have more then £15k equity in his house which again is some 85% LTV already.

We would probably have to do something along the lines as you suggest to avoid BTL mortgage, but noone yet confirmed that it has to be BTL mortgage?

He is coming down from Scotland tonight and we are going to discuss it all in detail, but first I wanted to know where we stand, what are we actually looking for.

I dont think it would have to be a btl mortgage has your dad his moving in, but its worth checking out.