Can I get a second residential mortgage?

redzak

Background is basically that I currently have a flat with a mortgage on it. However, I have recently got a new job and am planning to get married.

Issue is that whereas I would normally sell my flat the market means that I may not get back what i sold it for. I currently have a mortgage with Nationwide. What I would like to do is let out my current flat until such time it regains some value but in the meantime take on a new mortgage.

I have recently taken on a new job with a substantial salary increase meaning that I can now afford a house.

The questions I have are:

1) can I get a second residential mortgage with Nationwide. Having spoken to them they say that I may be able to get a 'consent to let', but to do this I first need to let out my flat before I can apply for a second mortgage with them. This doesnt work as I ned to find somewhere to buy before I rent out?

2) Am i best converting the mortgage to a buy-to-let and then freeing myself to look at the market afresh?

3) Can i get a second residential mortgage with a new mortgage provider on the proviso that I will be letting out my current flat and then obtain a consent to let from Nationwide until I can sell it?

Any advise greatly appreciated.

Thanks

dimbo61

57 views on this and no reply !!
Now you say you have little or no equity in your existing property so you cant get a BTL mortgage as you need about 20% equity plus fees.
Nationwide may allow you consent to let but I doubt in the current market you would get a second mortgage without a good 10/15% deposit and then they may take into account your existing mortgage.
Could you rent out your existing property for at least 125% of the mortgage cost ( ie get £500 a month with a mortgage cost of £400)

Thrugelmir

redzak wrote: »

I have recently taken on a new job with a substantial salary increase meaning that I can now afford a house.

Why not take the easy option and reduce your existing mortgage balance by increasing the monthly repayments?

getmore4less

I have recently taken on a new job with a substantial salary increase meaning that I can now afford a house.


Key will be the deposit.

What savings do you have?

redzak

Thanks for the responses to date.

I guess it would be easier if I put some numbers around this, as that should help make things clearer.

Current position

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My existing mortgage is for £120k with a flat value at purchase time of £130k (I had a £10k deposit). Current value of flat about £125k. My mortgage payments are interest only and are c£250 per month. The flat will easily let out for £600 per calendar month.

I am looking to sell this flat but only at a time when I can cover the full costs. Im happy to put it on the market immediately if that helps with securing a mortgage.

Future position

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I am now looking to buy a house at the same time as either letting or selling my existing flat, hence the temporary need for two residential mortgages.

I am looking at houses aorund the £300k mark and i have a c10% deposit (£30k).

My income is c£85k per annum (perhaps about £100k with non-guaranteed bonus) and im 33 years old. Therefore, actually being able to afford both properties isnt really an issue.

I have no outstanding loans, debts or credit cards.

I realise I am going to need to speak to a mortgage broker directly on this but apreicate the help and comments I am getting off here.

Regards

dimbo61

With the figures you give for the flat you should be able to get consent to let from Nationwide for up to 3 years ( only they can give you the answer)
Why pay more than £250K for a property 1% stamp duty under £250K and 3% over £250K
Keep building up your savings

antrobus

Also bear in mind that the Nationwide now charge an 'additional letting interest rate' of 1.5% after six months. Which in your case would mean an extra £150 per month, or 25% of your expected rental income.

getmore4less

Total borrowing £390k thats a 4.5 multiple so pushing on salary alone.

Gross yield on the rental is 5.7% so not too bad but on the low side for long term.

You probably need to look at the costings and lending tax wil be a 40% on anything you can't offset.

With £4500+ coming in each month should not take long to save up enough to get a better LTV.

Agree looking at the £250k limit might be a good move lower costs and better LTV