Assessing a mortgage application with background mortgages

Dave_Ham

Given my firm is on the smaller side of that equation, I am biased.

That said, I would hate to call a bigger player and get the new starter or least experienced as they are all salespeople and therefore do not necessarily help out the newer colleagues.

In terms of clout, you could counter argue that against desire as they are busier they may not fight hard enough on a complex case that may require a personal touch.

You could argue either way, although from experience the independents on here and elsewhere, personally stay closer to the market and the client..

Its a big call for you - good luck

kidmugsy

"I cannot sell this property right away because I may not break even."

I don't follow: can you explain?

zippy08

"I cannot sell this property right away because I may not break even."

Sorry, what's not clear? If I sell the property now, I'll lose money on the sale.

Are you looking for a particular angle on this?

Simon_gloster

Just be aware that if you do have background BTL's that the income you receive is either :

1) 125% of the mortgage payment
2) calculates as self funding on an 8% rule (ie £100,000 x 8% =£8,000/12 = your rentla payment and more.

Should this fit then the mortgages won't be taken into consideration for affordability purposes. If they are short, then the difference will be deducted from your overall potential borrowing.

Letting consent or BTL status may need to be proven mid application.

zippy08

Thanks for the info, Simon.

Letting consent or BTL status may need to be proven mid application.

I think this is going to be the big sticking point. The plan is to purchase, move into the new property, then let the current home for whatever period is appropriate, sell the property when appropriate.

It looks like lenders need to see a track record of rental, else they are being quite shy of making an offer.

Simon_gloster

Hi zippy,

It 'shouldn't' cause too many issues. If your intention is to let it out and it isn't currently, you clearly cannot prove rental, therefore a letter from a letting agent suggesting rental potential generally is enough for your new residential lender.

Otherwise you'd be assessed on your new mortgage with a mortgage debt in the background that doesn't have rent to offset it.

kidmugsy

zippy08 wrote: »

Sorry, what's not clear? If I sell the property now, I'll lose money on the sale.

Are you looking for a particular angle on this?

So, you'll lose money - so what? Is this some kind of strange superstition? If you keep the house you may lose even more on it at some time in the future.