2nd mortgage while selling home

ICanDoIt_2

:Scratching head:

I've got a bit of a sticky situation, but I'm sure you guys and gals will be able to give me some useful pointers.....


I've got a house I'm selling (went on market yesterday) asking price £92.5k, mortgage £68k.
I've found another house, £116k, that's not gone on the market and I got 1st refusal on it. To get this house, I need to complete within about 6 wks, otherwise it's off on the market, and I'dl have to pay full whack. Houses in the area this one is in are getting sold within 2 weeks for much more than this, and smaller in size.

soooooo, I need to get a mortgage on this other property asap, while current one is selling. I had a meeting with an IFA last week and he suggested a buy to let mortgage. I would need to get a 15% (~18k)deposit which I can just about afford . To do that, I need to get someone to say how much the house would rent for.

1) How do I go about getting rental income "quote"? Do I just ask an EA or the like to do that?

2) what other options / what can I do to improve chances of not getting a BTL mortgage? I don't really want to put that much deposit down.

It may seem obviuos to some of you, but I guess I need some guidance/confirmation on what I'm doing. That'll give me some confidence before I go see different IFA (fee free) later this weekend.

Thanks in advance!

(BTW, income £23-25k, SOA is somewhere on this great resource!)

Madjock

you need to get letters from 2-3 letting agents. Make sure they are ARLA registered, some lenders do require that and some don't. You need the rental income to be 125% of the mortgage payment ideally.
I'm afraid i don't know about the best LTV %, but I'm sure the mortgage advisers here will be along soon to help with that.

ICanDoIt_2

Thanks for that. It worrys me slightly that the "rental income" won't be as much as 125%. It is more likely to be 90% of the mortagage payments. This doesn't worry me as I will be living there and paying the costs when I move, but I can see from a lenders point of view that they should be concerned.

I'll ring some people to get some prices.

ICanDoIt_2

Just an update on this and yet more questions.......

The scheme of things now is the mortgage I'm getting requires me to get a guarantee on payments. My brother has offered his help on this. He can afford to cover my payments should the worse happen and I can't make payments.

1) Does this have any affect on his credit score? Or is it just the signing of an agreement and not on the application for the mortgage?

2) Will this means he has a interest in the property e.g. if he applies for another mortgage in later days, will he have to declare these facts to the new lender?

I've googled and searched on here, I should have asked the broker but I didn't have time today......

Cheers

silvercar

your brother would be credit checked - but this shouldn't affect his actual score.

it doesn't mean he has an interest in the property, but if he moved or applied for a mortgage his lender may take this into account when deciding how much to lend him. once you have sold your house you should be able to get his name removed as guarantor.