Strange situation

BimalP

I am in the process of looking for a remortgage and I had a short concern about a conversation I have just had with a broker.

We moved abroad about 2 years ago, and we plan on staying abroad for 2 more years and in the meantime we have rented out our property in London.

Now our fixed rate term is coming to an end and the current lender (nationwide) said that because we rent out our property they will charge an additional 1.5% on top of the SVR, putting the rate to 4% for the permission to continue to rent for 3 years. As this will only be SVR, and not fixed, I am worried the rates will rise and am looking to fix the rate for a further 2 years.

I have seen Buy to let rates at 3.39% upwards (some with high product fees), but nevertheless I will do the maths, and decide if I take a new lender or stick to the SVR.

My problem is that when I spoke to the Mortgage advisor, he asked me do we intend on returning to the UK, and I said I do not know that right now as I have 2 more years left on my work contract, but we will then decide if we move to the UK, move to another country or stay where we are.
He said that basically if we say we will return to the UK in 2 years, he might be able to get us a residential mortgage for a lower rate. As I do not know if we will actually come back to UK in 2 years I am wondering what to do. I will of course insist that they send me the letter of permission to let the property whoever the new lender will be.

• But I am worried if in 2 years we decide that we will not return to the UK.... What then?
• Is it a good idea to fix for a longer term than just the two years, and see if I can get an agreement for the length of the fixed period?
• Is this actually legal to get/Apply for a residential mortgage based on the fact that the house is already rented out, and will be for the foreseeable future...?

Any ideas or views is truly apprieciated...

kingstreet

BimalP wrote: »

Is this actually legal to get/Apply for a residential mortgage based on the fact that the house is already rented out, and will be for the foreseeable future...?

If you asked me to do it, I'd decline your request. You won't get a permission to let letter if you tell them you're going to live in it.

BimalP

Im not sure you read the whole post. The plan is not to live in the house for at least 2 years nor do we know if we will move into the house after 2 years....

holly_hobby

Applying for a residential mge in your current situation (no intention to live in at the current time)would be fraudulent (sounds harsh but its important to understand the serious nature of mis-representing information) .

You definately need a buy to let remortgage, and a lender who is prepared to look at ex-pats.

You need to contact a whole of market mge adviser, who should be able to tell you if any of the BTL lenders are happy to consider ex-pats. (I would suspect as you are not currently resident in the UK - if they consider you, they would want the letting professionally managed)

As a side note - you should be aware that you should also be declaring the rental income recd for UK tax purposes.

Hope this helps

Holly

handytips

The broker gave you bad advice, you really do need to shift it to a Buy to Let mortgage and make sure you have a Landlords on your property, a residential insurance will be null and void.
I really cant believe there are people in my profession still giving dodgy advice, i wonder !!!!! what part of the country bima has his property in ?

BimalP

Thanks for the reply.
In this case, it concerns me that a qualified mortgage professional is advising that based on my circumstances it maybe possible to get a residential mortage. I did not get the impression this was a problem, and it seems it was standard practice for a person in my position. It seems I was adviced incorrectly...

Just to clear up, I am doing everything by the book. The house is under full management by a reputable national letting agent, and also PWC do all my tax returns for me yearly, both in the UK and my current country of residence. They are fully aware of the rental income I recieve.

BimalP

handytips wrote: »

I really cant believe there are people in my profession still giving dodgy advice, i wonder !!!!! what part of the country bima has his property in ?

The property is in London.
Also, do you think even though a residential mortgage is offered to me, I should opt for a BuytoLet to avoid problems?

handytips

What part of the country do you hail from BimaIP, as i think the brokers advice is bad. You either take the hike offered by your existing lender or you move the mortgage to a Buy to Let deal, you can get a 3 year fixed with BM Soultions which may suit your needs.

kingstreet

BimalP wrote: »

Im not sure you read the whole post. The plan is not to live in the house for at least 2 years nor do we know if we will move into the house after 2 years....

EXACTLY!

No way Id recommend you took a residential mortgage on a property you obviously intend to let.

As mentioned, if the consent to let letter is that important to you, this route is going to end up being the furthest thing from achieving your aim.

handytips

YES Get a Buy to Let mortgage it is as Simple as that.
Well what a suprise London, no wonder the FSA very rarely ventures out of the capital, they have plenty on their plate still by the looks of things. Advisors like this really do make me sick.
If i were you i would google and advisor in Wales, Scotland, Cornwall etc etc and get a non london broker to sort it for you. Sorry to all the good Brokers in London, but you must see what i mean.

herbiesjp

What figures are you looking at - property value and mortgage amount?
What is your income?

Are you a UK national?
What country do you now work in?
Do you work for a multinational company?

Sticking up for London brokers, or at least those of us who know how to submit a proper mortgage application :beer: