NRAM Permission to Let & getting 2nd Mortgage

carlw

Hi,

I’ve had a NRAM mortgage for last 4-5 years. I borrowed over 100% and have been over paying and would estimate (realistically) that my flat is worth about what i paid for it and that’s roughly what i have outstanding 125k.

I’m overpaying every month, and saving to move. I will have saved 18-20k by end of next year so should be able to move then, and I have no other debts.

I’m really looking for someone with knowledge/experience of keeping hold of my property and renting it out. Then using my savings to buy a new home. The obvious questions are:

• Will the rental income cover the mortgage - So i need to speak to an Agent
• Will NRAM give permission to Let - So i need to speak to NRAM
• Will the council (my freeholder) give permission to Let - So i need to speak to them.

But before all this i need to know if Mortgage lenders will even offer a new mortgage to me if i already have a mortgage on an existing property. Or when i obtain permission to let will NRAM change my mortgage to a BTL mortgage? Any additional advice would be welcome.


Thanks

Thrugelmir

NRAM are no longer in the mortgage market.

So suggest you use your savings to reduce the mortgage further. Then look at the options for remortgaging onto a lower rate of interest. As a first step.

Your new lender would require to live in the property for at least 6 months before even considering CTL.

carlw

Thrugelmir wrote: »

NRAM are no longer in the mortgage market.

So suggest you use your savings to reduce the mortgage further. Then look at the options for remortgaging onto a lower rate of interest. As a first step.

Your new lender would require to live in the property for at least 6 months before even considering CTL.

Thanks for your reply but that certainly isnt an option. Im saving to buy a new house, not to stay in my current flat. If i use my savings to remortgage my current flat ill have no deposit for my new house. If i can not rent my existing flat then i will just sell it and use my savings to buy a new house.

Thrugelmir

carlw wrote: »

Thanks for your reply but that certainly isnt an option. Im saving to buy a new house, not to stay in my current flat. If i use my savings to remortgage my current flat ill have no deposit for my new house. If i can not rent my existing flat then i will just sell it and use my savings to buy a new house.

I was merely looking at the short term in making my comments. One step at a time.

You'll be paying 4.79% to service you mortgage with NRAM and earning less on your savings. Hence my suggestion.

In selling the flat you'll need to repay the existing mortgage.

As your not moving until the end of next year. Remortgaging may be an option worth considering. As if you find a suitable deal you may be able to port this to the new property. |Just topping up with the amount of money you require to fund the purchase.

Oxid8uk

Most lenders won't give consent to let if they know you are going to buy another house to live in - they will insist you go onto a BTL mortgage for which you would need 25% deposit. When getting a second mortgage you will probably need 20% deposit for the new property too (depending on the lender).

carlw

Thrugelmir wrote: »

I was merely looking at the short term in making my comments. One step at a time.

You'll be paying 4.79% to service you mortgage with NRAM and earning less on your savings. Hence my suggestion.

In selling the flat you'll need to repay the existing mortgage.

As your not moving until the end of next year. Remortgaging may be an option worth considering. As if you find a suitable deal you may be able to port this to the new property. |Just topping up with the amount of money you require to fund the purchase.

Again thankyou, but i disagree.
If i paid down the mortgage so i had a 90% LTV and then remortgaged. Any mortgage fee would wipe out any savings in interest rate over such a short period and i as mentioned above I plan to move in 12-14 months. The shortest term would be 2 years so id either be stuck or have an exit fee as well. Please feel free to prove me wrong though.

carlw

Oxid8uk wrote: »

Most lenders won't give consent to let if they know you are going to buy another house to live in - they will insist you go onto a BTL mortgage for which you would need 25% deposit. When getting a second mortgage you will probably need 20% deposit for the new property too (depending on the lender).

Thanks, Why would a lender give permission to let then? They would know you werent going to live in the property, hence asking for permission to let, so would they only offer it if they assumed you were renting elsewhere and not buying?

Ill have the 20% deposit for the new house saved, as mentioned.

carlw

Thrugelmir wrote: »

I was merely looking at the short term in making my comments. One step at a time.

You'll be paying 4.79% to service you mortgage with NRAM and earning less on your savings. Hence my suggestion.

In selling the flat you'll need to repay the existing mortgage.

As your not moving until the end of next year. Remortgaging may be an option worth considering. As if you find a suitable deal you may be able to port this to the new property. |Just topping up with the amount of money you require to fund the purchase.

sorry i missed the last paragraph when i read this the first time. That may well be a good idea, thanks ill look into it.

Oxid8uk

In most cases they will only give consent to let if you have a genuine reason that you can't live there i.e. you are having to move away because of work, are in the armed forces and away on duty, having to move to care for someone etc.
Myself and my partner have just bought a house to live in and he has tried to get consent to let for his flat while he tries to sell it, but because they know he has another house to live in with another residential mortgage on it they won't grant consent and have told him he needs to change to a BTL mortgage. Unfortunately he doesn't have 25% equity in it so can't do that. Even though they know he is trying to sell it they still won't grant consent as they 'don't believe it will be a short-term thing', i.e. they think he'll take the house off the market and then rent it longer term to make money/not have to pay BTL rates etc. So his only option is to leave the place empty so there are minimal bills to pay on it and hope it sells soon....

carlw

Oxid8uk wrote: »

In most cases they will only give consent to let if you have a genuine reason that you can't live there i.e. you are having to move away because of work, are in the armed forces and away on duty, having to move to care for someone etc.
Myself and my partner have just bought a house to live in and he has tried to get consent to let for his flat while he tries to sell it, but because they know he has another house to live in with another residential mortgage on it they won't grant consent and have told him he needs to change to a BTL mortgage. Unfortunately he doesn't have 25% equity in it so can't do that. Even though they know he is trying to sell it they still won't grant consent as they 'don't believe it will be a short-term thing', i.e. they think he'll take the house off the market and then rent it longer term to make money/not have to pay BTL rates etc. So his only option is to leave the place empty so there are minimal bills to pay on it and hope it sells soon....

Thanks very much thats really useful.

gwernybwch

Oxid8uk wrote: »

In most cases they will only give consent to let if you have a genuine reason that you can't live there i.e. you are having to move away because of work, are in the armed forces and away on duty, having to move to care for someone etc.

I'm not sure who your lender is, but when I asked for a CTL from NRAM there didn't seem to be any issues. Admittingly I have actually moved away from the area, but they have given me CTL for over two years.