NRAM Permission to Let & getting 2nd Mortgage

Thrugelmir

gwernybwch wrote: »

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.

CTL is normally reviewed on a case by case basis. More recently there seems to be an increase in declines. As lenders I suspect have seen people use the CTL route as a method of renting out their properties. Rather than attempting to sell into what has become a very slow stagnant market. Where property can take months to sell.

Oxid8uk

gwernybwch wrote: »

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.

My partner has tried getting CTL on his flat but his lender (The Nottingham) won't consent as we have just got a joint second residential mortgage together.
I on the other hand do have a property on a CTL (through Nationwide) but I applied for this before applying for the second joint residential mortgage. I am sure when my CTL comes up for renewal (after 3 years) Nationwide will probably look at it differently.

When you moved away did you get a second residential mortgage or go into rented accommodation? If the latter then they are more likely to grant you CTL.

carlw

is there a mortgage broker out there that can advise me on the likelyhood of me getting a second mortgage on a new property if i were able to get CTL from NRAM? If i had 10% deposit for new property and met all the earning criteria for the new property etc.

Thanks

Carl

Oxid8uk

Carl - you will probably have to have more than 10% deposit for your second property if you already have residential mortgage, even if the first mortgage is on CTL. From my recent experience I had to have 20% equity in my first property and 20% in the second.

Thrugelmir

Oxid8uk wrote: »

I am sure when my CTL comes up for renewal (after 3 years) Nationwide will probably look at it differently.

NW now apply a 1.5% loading on top of the product interest rate.

Taken the shine off renting property (using CTL) for many.

In time other lenders will no doubt follow suit.

Oxid8uk

Thrugelmir wrote: »

NW now apply a 1.5% loading on top of the product interest rate.

Taken the shine off renting property (using CTL) for many.

In time other lenders will no doubt follow suit.

NW add the 1.5% after 6 months - I had my letter through today to remind me! They also charge a £50 admin fee. But still, my interest rate even with the additional 1.5% is far lower than a BTL rate.

Somerset

gwernybwch wrote: »

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.

Me too. Admittedly it was over six years ago, before the economy fell apart. But their criteria was quite tough even then re LTV & rental.

Thrugelmir

Somerset wrote: »

Me too. Admittedly it was over six years ago, before the economy fell apart. But their criteria was quite tough even then re LTV & rental.

Northern Rock is now split into 2 parts. NRAM contains the part that is being run down. So a totally different ball game.

gwernybwch

Oxid8uk wrote: »

When you moved away did you get a second residential mortgage or go into rented accommodation? If the latter then they are more likely to grant you CTL.

It was to move into rented accomodation, so point taken.

Strangely enough I have just been given an offer in principle for a second residential mortgage, even with that lender fully aware that I already have one residential mortgage and that property is currently let (with a CTL).
I've also been given another offer in principle to convert the residential mortgage into a BTL mortgage, but with me living in rented accomodation (i.e. me not having a 'house of my own').

So a lender is unlikely to allow a CTL for you to rent out your current house if they think that you are only doing so that you are going to buy a second house, but are more than willing to lend to buy a second house if you already have tenants in your first house!

Sometimes I really struggle to understand lenders decision making. Thankfully the good people of MSE are here to explain!

Thrugelmir

gwernybwch wrote: »

Strangely enough I have just been given an offer in principle for a second residential mortgage, even with that lender fully aware that I already have one residential mortgage and that property is currently let (with a CTL).

Have you had a written formal offer or a decision in principle? There is a considerable difference.