2nd Residential Mortgage & Another question

Ed_S

Hi all,

I have a couple of questions:

Firstly, I've got a residential mortgage with NRAM, with consent to let, and I have a tenant in there. I've had consent to let for two years now.

I currently live in a rented house but would like to buy a new build on a development in the area, in the next 12 months.

Q: Can I have another residential mortgage if I've got consent to let on the first one, or will lenders insist that I convert to a BTL? (I can't do this as there's no equity in the property)


Secondly, my other half has her name on a residential mortgage with her ex. She's contacted RBS (it's a One Account) to see what the options are for being removed, and they've said her ex would have to remortgage on his own (which he can't do as there's no equity in that place either, and he has no deposit, apparently) or it has to be sold. So it's up for sale, but there has been no interest, and the price is as low as it can go to cover the mortgage if/when it's sold.

Q: Is there anything that can be done to remove her name from this mortgage?

Thanks in advance

kingstreet

Ed_S wrote: »

Q: Can I have another residential mortgage if I've got consent to let on the first one, or will lenders insist that I convert to a BTL?

Yes, you can. No, they won't.

Secondly, my other half has her name on a residential mortgage with her ex Q: Is there anything that can be done to remove her name from this mortgage?

Legally, she can force a sale of the property, but this is likely to be expensive, time-consuming and leave her with an unaffordable bill for negative equity as it's likely to sell for less than the value of the mortgage.

I suggest you talk to an independent or whole market broker. There are lenders who will ignore the mortgage you have "in the background" as the property is tenanted. Further, they may treat your partner's current mortgage like a credit agreement and simply take the monthly cost off her income before multiplying it, as they would with any other loan.

For example, you both earn £20k each and her mortgage commitment is £300 per month.

That makes £20k + £20k - £3600 (12 x £300) = £36,400 x 4 = £145,600 maximum mortgage if that lender's multiple is 4 x joint incomes.

It's worth remembering, with no tenant and your partner's ex not paying, it would leave you both in a situation where you'd have to pay all three mortgages.

gwernybwch

kingstreet wrote: »

Yes, you can. No, they won't.

If you have no equity in your rental property, you might struggle to find a lender that would actually lend on a second residential mortgage.

I've been given an offer in principle for a second residential mortgage based on that I have tenants living in the house associated with the first residential mortgage.

Although the building society offering the second residential mortgage did say that should I progress to a full application they may require additional information to ensure that I still met their affordability tests.

The Mortgage Adviser didn't outline what the affordability criteria actually was but as neither mortgage exceeded 70% LTV and taking into account that I could probably cover both monthly mortgage payments (should there be a void on the rental property), the Mortgage Adviser suggested that I met their affordability tests.

Ed_S

Thanks for your replies both.

I'm speaking to a mortgage advisor this week, hopefully.