Will anyone give us a buy to let mortgage & second mortgage?

crazygeordiegirl

Forget it, helpful advice? It won't be found here.

DannyboyMidlands

Where is the deposit for the new house coming from? Do you have savings?

kingstreet

What's the likely rental value of the flat? Will you be granted consent to sublet by the freeholder?

Whats' the purchase price of the new property you'll need to borrow 90% of?

Dave_Ham

There are a lot of variables and barriers here, although the good news is it will be possible subject to a few things going your way.

Consent to let or ability to get a let to buy at 80% on your existing place will be the first and biggest hurdle in my opinion.

Suggest you have a good chat with your advisor and check they are experienced as this plan does have many pitfalls.

Do not let them credit check you until you are sure that they have a robust plan to optimise your success, including justifying the lender selection.

Good luck

kingstreet

Points to think about;-

- £115k purchase = £103,500 mortgage.
£3k on credit card = monthly commitment of £90 x 12 = £1,080 deducted from £21k joint income.

You therefore need £103k divided by £20k income = more than 5X !

- rent of £400 per month.
BTL lenders insist on rent being 125% of the monthly mortgage interest, based on a rate of perhaps 6%. Calculating out these figures, the £400pm rent will only support a mortgage of £64k. How much do you owe?

Consent to let from your existing lender might get you around this requirement.

- Some lenders will deduct the cost of the existing mortgage from your income even if it is rented out. This will allow for void periods where you have two mortgages to pay and no rent.

- a new 90% mortgage will involve a higher rate. A 25 year mortgage of £103k at perhaps 5% or more is going to cost over £600 per month.

- the cost of remortgaging to a BTL and buying the next property could run into £4k to £5k. Do you have funds to cover this as well as the deposit?

I'll try to think of any other issues which might affect.

irishcol

crazygeordiegirl wrote: »

Thanks for the advise.

Feeling a bit down about it all at the minute TBH.

Spoke to my current lender, they will transfer my mortgage to a buy to let at a rate of 6.19%.

Would this be my best option or do you think I might get a better rate going elsewhere?

Also, they would only lend us get a new mortgage of £53k due to my low income/our outgoings.

Who are the best lenders to try for these applications?

I am currently with chelt & glos

Thanks

Seems to me that you can't afford to keep your current flat and buy a new place.

In that case, you need to accept (like the vast majoirty of people) that the only way to get another house is to sell your current one. If it's not sold for 4 years, then it's overpriced and you need to reduce it. Its current value is unfortunately not what you paid for it - if it's any consolation, then the house you're buying has probably not gone up in the same time period.

If you can sell your current place for more than is currently outstanding on the mortgage, and still afford to buy the new place, then that's a pretty good place to be. You only have to look around on these boards to find lots of people who can't.

I don't mean to sound rude, but it sounds like you're being a bit greedy by hoping for a buy to let and a new house, with such a low household income.

Dave_Ham

What is the value of your current mortgage?

Unless this is bigger than £90k ish, something is not adding up about the C & G figures they will lend you or there are other financial commitments maybe?

Did they tell you the new monthly payment if you moved onto buy 2 let rate of 6.19%?

Dave_Ham

Ok - so it will be very tight and cost a lot on fees to convert to a buy to let and not sure it would be best advice..

but

there is probably just about enough for your broker to go at, not sure how c & g have arrived at their figures for borrowing on new mortgage but hey ho.

See how you get on with your advisor - good luck

Dick_here

You've a joint income of 21k, an existing mortgage of 65k and a 3k outstanding c/card debt. You're wanting to take out another mortgage of 100k+ on top We can afford it (it just doesn't look that way to the lenders). No wonder the country is in a mess.

Dave_Ham

Come on people - we are a being a bit hard here.

If you read the whole thread, the OP is an accidental landlord trying to move themselves forward with a good credit rating and no track record of poor payments etc.

And to be fair they came on looking for answers and not condemnation...

kingstreet

FWIW I gave an opinion of the issues here.

Basically, regardless of the BTL, no lender is going to lend over 5x income to get the purchase away.

I'm sorry if it's not sugar coated but the facts speak for themselves here...