Mortgage change to BTL advice please.

Ian1504

Hi,
I'm after some advice regarding my sons house/mortgage.
He bought a house 2 years ago for £115000 and has a mortgage with the Halifax which is presently costing £467/month.
About a year ago he got into difficulties with his finances but thankfully managed to keep his mortgage going. He asked for and received consent to lease and has moved someone in who is paying rent of £500/month. He moved back home.
He has now moved onto to a new job/life in the UAE but at this time wanted to keep the house going.
The consent to lease is due to run out shortly and the Halifax have offered two BTL mortgages.
1. Fixed 3yr deal at 5.89% costing £550/month and a fee of £1499. Early repayment charge £3000.
2. Tracker 3yr deal at 6.39% costing £580/month and a fee of £999. No early repayment charge.

I dont see he has any option but to go with either of these deals as he will have a bad credit rating following his previous years troubles.

as an alternative if he decided to sell the property would he be able to stay on the mortgage he has now which is the standard variable until the house is sold?

Any advice would be appreciated.

kingstreet

If he does nothing, Halifax will withdraw the consent to let and levy a 1.5% penalty on the rate he pays until he occupies the property again, or repays the mortgage.

Dave_Ham

Hi there,

Most of your assumptions are correct. Buy to Let mortgages are typically a higher credit score and given the circumstances you have articulated he is highly likely to be unable to get a buy to let mortgage, aside from the cost increases.

He therefore suffers the Halifax rate increase as a long term option or as you state he requests a stay of execution on the SVR until the house is sold.

From experience Halifax would be open to this, although they will police it so please don't see this as a longer term option. They are red hot on this at the moment within the Lloyds Banking Group.

Good luck

Thrugelmir

Ian1504 wrote: »

as an alternative if he decided to sell the property would he be able to stay on the mortgage he has now which is the standard variable until the house is sold?

As Kingstreet says. There is a default option imposed by the Halifax.

The downside is that this potentially black marks his credit rating as obviously he has made no attempt to rectify the situation.

Working in the UAE one assumes he can afford to subsidise the mortgage until the property is sold. A better solution for the longer term.