remortgage on a buy to let?

artytart

I have a buy to let house worth around £110K with a mortgage of £85K. I have debts of £5K to clear which are putting me into debt crisis right now. I cannot sell the house as my dad rents it (I know, I know) but can you re-mortgage on a buy to let? I know I could just ask the mortgage company but have a feeling that advice from you guys will be unbiased & straight!

Thrugelmir

The fact that a family member rents it may also cause issues with some lenders.

artytart

I realise that I am not meant to rent to family members. It was not my initial intention but Dad became unwell unsuited to his high level flat at exactly the time the purchase on this place came through so put him in it. He's now well & i am a tad stuck! Didn't know what else to do at the time but see the error now. I was just wondering whether a remortgage is a sensible option. I shall ask on the debt free forum too...

kingstreet

Who you rent the property to is a secondary issue at the moment.

The big problem is the property simply isn't worth enough to generate the level of borrowing you want.

At £110k, a mortgage of £90k makes a loan to value of 82% and you will struggle to get near that.

You could talk to a whole market or independent broker but it's difficult because of;-

- the loan to value
- the rental income requirement*
- the family issue.

* £90k x 6% = mortgage interest of £450 x 125% = rent needed of £563 or more.

How accurate is your valuation?

holly_hobby

Assuming you can make the figs work, you need a regulated BTL lender where in excess of 40% is occupied/let to family members.

Mortgaging as a 2nd property for dependant relative would be easier to achieve - but your earned income will need to stack up.

Speak to a broker (verify their fees before hand).

Hope this helps

Holly