Let to Buy

follyfoot

When remortgaging to let to buy do mortgage companies ask for proof of salary or do they base the mortgage on achievable rent? Also how is the money transferred - is it given to me or transferred straight to my solicitor to fund the new purchase?

herbiesjp

HI there

I think you may be getting a little confused with the terminology.

Are you keeping your current property? Are you staying with the same lender i.e. have they given you consent to let on your residential mortgage deal has expired?

So you are letting this out and buying the new property. The new lender (the Let to Buy lender for the new property) is saying that they are happy for you to let the first one out in order for you to buy the second property.

In this instance as long as the rental income coevr the mortgage payments (by varying amounts for different lenders) they will "ignore" this commitment in the background. They will then offer you a mortgage on the same underwriting as a normal property purchase i.e. same income multiples etc based on your incomes


Or are you converting your current property to a Buy to Let mortgage? If so - this BTL mortgage will be agreed on the basis of the expected monthly rental income on the property.

Again a new property purchase for your main residence will be based on your incomes.

HTH

follyfoot

hello I am keeping and letting my current property and remortgaging it to a buy to let mortgage in order to buy a new one which will be my main residence. I am remortgaging with a different lender

herbiesjp

The BTL re-mortgage will be assessed on the rental income of that property - some lenders however will want proof of a minimum personal income

The new property that you purchase will be based solely on your incomes - remember that not all lenders like applicants if they have properties in the background

So make sure you look at your whole scenario first to make sure that you have set yourself a plan and the rate/lenders that can agree on what you want to do.

HTH

follyfoot

herbiesjp wrote:

The BTL re-mortgage will be assessed on the rental income of that property - some lenders however will want proof of a minimum personal income

The new property that you purchase will be based solely on your incomes - remember that not all lenders like applicants if they have properties in the background

So make sure you look at your whole scenario first to make sure that you have set yourself a plan and the rate/lenders that can agree on what you want to do.

HTH

when you say not all lenders like applicants if they have a properties in the background - do you mean they do not like lending to those with multiple buy to let properties? i would have thought this would make the borrower more attractive?

herbiesjp

Not necessarily - as some lenders are looking at the overall borrowing against the personal income, and only considering part of the rental income.

So if you have 3 properties earn 20 k but have 500k outstnading on 3 mortgages these lenders would say no to you.