Buying a 2nd property, with consent to let on the 1st property

flugelhorn_2

I have had an offer accepted on a property and have decided to rent out my first property(which i am living in at the moment). I have contacted my first lender and they did not see a problem giving me consent to let although i have not had written confirmation of this at the moment. I do not want to switch to a buy to let mortgage as:

a) I have a favourable rate on my current deal
b) I dont have the required equity in the property to agree a buy to let product

I have applied for the second mortgage but the whole process has been a bit confusing? When i originally contatced the central mortgage service at the bank, i was told that lending the money should not be a problem as my monthly payments on my 1st mortgage will simply be counted as a contractual payment to be met. They agreed the mortgage in principle and I was happy with that. However when I visited the bank and spoke to an advisor in person they explained that I could not lend the money as the amount i owed on my first mortgage had to be subtracted from the total which i could borrow leaving me just short of what i needed. I then spoke to the central mortgage service who again re-iterated that as the 1st mortage was via a different lender, it would just be counted as a monthly payment to be met. I have since applied for the mortgage but have no idea where i stand? I included a statement from an estate agent confirming what they feel the property was worth per month on the rental market(which covers my 1st mortgage payments) but I feel a bit negative about the outcome of this process. It was a bit messy to say the least. Has anybody else been through a similar process? what were your experiences?

Cannon_Fodder

Not being able to BTL, means you need your income to support both mortgages.

How borderline that is, will vary by Lender/criteria. Why this should differ between their call centre and branch staff, who knows. Perhaps some detail was missed on the "visit", that was visible on a computer screen. Perhaps the call centre person was mistaken, it wouldn't be the first.

Have you tried looking at Let-to-Buy?

Or asking your current Lender to do both deals - keeping all the eggs in one basket sometimes works to your advantage.

You perhaps also ought to start planning, for when your current deal expires, to have sufficient equity to convert to BTL.

flugelhorn_2

I am free to move product on my first mortgage but i am currently only paying 2.5% so i want to keep on this until its not in my interest. I have already made the decision to add to the equity over the next couple of years to qualify for the BTL mortgage deals.

Overall both mortage payments would come to just over 36% of our combined take home salary. We have clean credit records and no other debts.

I'm not sure how let to buy works? My original lender is not offering 90% mortgages so I would not have the deposit.

herbiesjp

You are looking at a Let to Buy scenario (not the same as a BTL).

You are letting out your first property and buying a new main residence.

The way this would work with most lenders, is this: Property 1's rental income needs to coevr the mortgage payment. If its does, then the mortgage commitment can be ignored when applying income multiples/affordability to your new purchase.

If the rental income does not cover the mortgage, the the shortfall would be annualised and deducted from your income - and then income multiples/affordability calculated.

It sounds like your current lender is making this overly complicated. If they have given consent to let then fine.

Find another lender that will agree the mortgage on the new property - provided the new lender is offering the best deal for you in your current situation.

flugelhorn_2

That is the way that i understood it, and the way that it was explained to me in the first place. I now have written consent to let from my lender for property one.

I am currently living in property 1 so will not have a tenant for a period of time when i move into property 2(if the mortgage is accepted). I am sure that we can afford this relatively comfortably but how will the bank see this? The rental market is reported as being strong because people are struggling to get mortgages so hopefully i would not be without a tenant for long.