Mortgage on new property - getting lender to ignore btl?

bb169

Hi All, was wondering if you could help me as I am having some sleepless nights worrying about this.
Bit of a background, we are putting our flat (which we live in) up to let as we have had no luck selling it. (we are in the process of getting consent to let from our mortgage advisor and have landlord insurance in place etc.)
Income details: Me: £17400 a year approx. Wife: Just had her hours increased at work so Approx £5500 a year. Child benefit £960 a year.
We will need a £90,000 mortgage (90% LTV) for the new property.

We spoke to one mortgage advisor who said getting that mortgage should be no problem however to get the new mortgage we would have to have bank statements showing rental income was being received to cover the mortgage on our flat. (problem as we still live in the flat at the minute and have no where to go)

We have had an offer accepted on a house and so spoke to the mortgage advisor from the vendors estate agent. He again said we should be able to get the mortgage we needed however we only needed evidence from a letting agent that our flat would let out for £xxx a month for the new mortgage provider to ignore the mortgage in the background.

Now, who is correct? If the second advisor is good should he be able to sort this out for me? The advisor won't start the application process until our conset to let has come through which is why I am asking on here rather than bug him alot.

Any advise greatly received.

Lbarn

I would be very wary of the estate agents mortgage advisor, as personally I think he will tell you what you want to hear in order to get you to sign up with him.... they charge a fee just to process the mortgage application, then earn from the lender.

Looking at your situation, I would be worried what if you got a tenant and they didn't pay or left and you couldn't find a new tenant - how would you pay both mortgages?

I know someone who earns very good money £60k +, has a £180k house with only £20k left to pay and bank will not give him a second BTL mortgage.

bb169

Lbarn wrote: »

I would be very wary of the estate agents mortgage advisor, as personally I think he will tell you what you want to hear in order to get you to sign up with him.... they charge a fee just to process the mortgage application, then earn from the lender.

Looking at your situation, I would be worried what if you got a tenant and they didn't pay or left and you couldn't find a new tenant - how would you pay both mortgages?

I know someone who earns very good money £60k +, has a £180k house with only £20k left to pay and bank will not give him a second BTL mortgage.

Just to clarify, we are not looking for a second BTL mortgage, the second mortgage would be residential.

We are planning on taking rent protection insurance incase of a non paying tenant, and we are hopeful there will be no problem getting tenants as alot of the flats in our street are let out and never stand empty, we also have a contingency fund for this and our money left over each month after commitments would cover the mortgage payment on the flat if worst came to worst.

ACG

I agree with the first post, advisors at estate agents can often make all the right sounds but when it comes to it not be able to back it up.

That being said, i actually think he is right. You obviously cant rent it, but get a letter from an estate agent advising how much it would rent for (it usually needs to be 125% of the mortgage repayment) and also get some print outs from Rightmove to back it up from other sources and you shouldnt have too many problems.

bb169

Thanks for that.

And both advisors were from estate agents (just different ones!)

Thrugelmir

bb169 wrote: »

We are planning on taking rent protection insurance incase of a non paying tenant, and we are hopeful there will be no problem getting tenants as alot of the flats in our street are let out and never stand empty,

Good practice is to work on 2 months void per annum.

bb169

Thrugelmir wrote: »

Good practice is to work on 2 months void per annum.

Thanks, will keep that in mind.

Mrs_Z

I'm no expert but from what I've understood I think consents to let are only given for a certain period of time, 1-2 years. Usually, after that the lender will either increase the interest rate or ask for you to move onto their BTL products. What would happen then? Could you afford an increased mortgage on the property?

I hope you have also researched all the implications of being a landlord, sometimes you need deep pockets to cover the unexpected... boiler breakdowns, bad tenants, longer than anticipated void periods...

bb169

Mrs_Z wrote: »

I'm no expert but from what I've understood I think consents to let are only given for a certain period of time, 1-2 years. Usually, after that the lender will either increase the interest rate or ask for you to move onto their BTL products. What would happen then? Could you afford an increased mortgage on the property?

I hope you have also researched all the implications of being a landlord, sometimes you need deep pockets to cover the unexpected... boiler breakdowns, bad tenants, longer than anticipated void periods...

My consent is 3 years and they have already hiked the interest rate up for it! And yes I have researched the implications thanks, as I have already said I have a contingency fund/landlord rental protection insurance etc.

SouthCoast

landlord rental protection insurance etc.

Check out the small print.

Insurance is great until you come to claim on it.