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Can I get a second residential mortgage?
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redzak
Posts: 144 Forumite
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
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
0
Comments
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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)0 -
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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?0 -
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
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
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.
Regards0 -
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 savings0 -
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.0
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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 LTV0
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