Remortgage Advice

njbhorn

Before I start badgering my Mortgage Broker is it reasonable to assume the following

House Value 630K
Flat 1 Value 275K (rented at £900 a month)
Flat 2 Value 225K (will be rented at £900 a month)

Is it reasonable to get a 90% Mortgage on the house?

And a 70% Buy To Let Mortgage on the two flats.

The idea is to finance a further property as a second home without having to sell the house. Eventually we will sell the house releasing funds to reduce the mortgage.

We are 50 years old and 47 years old and a joint income of 150K

Many thanks for any replies.

dimbo61

You would struggle to get a 90% LTV mortgage at the moment and pay higher rates than you need to.
You have not given the current size of the 3 mortgages you have 1 residential and 2 BTL,s ?
Much better off seeing a Whole of Market Mortgage Broker and a good accountant( tax side)

Leon_W

You'll come up against lenders maximum loan sizes on the house.

Most lenders have a limit of £500,000 for 90% lending which reduces as the house value increases. More likely to get around max 80% LTV on that valuation.

njbhorn

Thanks for the replies.

The existing mortgage is for the house only currently 410K. The two flats are owned outright with no mortgages.

Leon_W

70% on the flats seems reasonable but again, this could be restricted by lenders rental criteria.

For example, Flat 1 @ £900. Lenders rental calculation is generally 125% coverage of the mortgage payment at a typical rate of 4.99% So, to fit that criteria the loan size could be no more than £173146. Therefore the LTV is irrelevant as it is 63%.

Flat 2 is better as the rental income proportionate to value is OK and 70% LTV should be acheivable on that one.

Regards

njbhorn

Thanks for the info Leon it is very useful.

What do the lenders need for the monthly rental for their 125% calculation?

If the flat has never been rented before then how can you get the BTL? Do you get a valuation for rent like you would a valuation for a purchase?

Regards

Nigel