Living abroad and renting UK property - buy to let?

masterchef98

Hi,

I've been a big mse fan for a while but am new to the forums. I really need some advice on what to do about my mortgage.

We bought a house when prices were really high and then 9 months ago my partner was relocated to Gibraltar so we have moved abroad and are renting here. As the prices have gone down so much we didn't want to sell so we got consent to let from our current morgage providers for 12 months but will need to get a new mortgage when that year ends, they have been taken over so will ride out existing mortgages but do not offer any new ones.

The impression I've got is that we need a buy to let mortgage, despite the fact that wasn't our intention and the market rent doesn't cover our mortgage + insurance at the moment, let alone if we get charged the higher interest. This is a bit of an area of disagreement between us as I tend to think that if we're losing money on the house renting it out we might as well just sell it and get all the losing money out of the way in one go!

We both work full-time and have an average joint income, I can't remember the specifics of our current mortgage situation, or know the exact value of the house now but it would be about 80-90% of the value that we'd need to borrow. I've looked at a couple of websites and it seems that we're not eligible for btl, I've got a fa looking into it too but wanted to get any other opinions.

Thanks in advance,

holly_hobby

You wil have to remortgage to a traditional BTL mge, as you intend to let the property from the outset.

BTL mges have a max LTV of 75%, with rental income (broadly speaking) to be 125% of monthly mge committment - so according to the figs you have quoted, you are currently outside criteria on both counts.

Sorry ... I think this may be the time to sell .unless you can improve upon the sums involved, at which point you would need to source a BTL lender who considers ex-pats. (a good whole of mge broker would be able to do this for you - if as I say you can get the figs to suit BTL criteria)


Hope this helps

Holly

masterchef98

Thanks, that does help, I didn't realise they were all 75% which we might just manage somehow and had no idea about the 125% for the rent which I don't think is remotely achievable!

I don't think we'll end up having any choice but to sell, but at least there'll be a few less lines and a bit more money in my monthly budget!!

holly_hobby

The only other think I can think of re the rent is that (before the crash) one lender Bristol & West (who have bitten the dust), would accept the rent covering just 100% of the mge if you selected a 5 year fixed product.

Now, the remaining BTL lenders may still consider this, or not, I'm not currently directly involved in mortgage placement, nor do I have access to mortgage brain or other search engines, maybe an active mge adviser on the forum will be able to give you a heads up as to if such criteria survived ...


Hope this helps

Holly