New Mortgage on second house?

bring1t

Hello experts....

My wife and I relocated 18 months ago due to work. At the time we tried to sell the house we owned but could not in the timeframe we had so we rented it out (consent to let, monthly mortgage cost £762, monthly rent income £765, 2% above BOE, £140k remaining, repayment, house now only worth prob £155k).

Now we have ourselves settled in our new area, we would like to purchase a home (£300k value, £30k deposit)

I appreciate I probably need to speak to a mortgage adviser on this, but I was wondering if there were any opinions on whether this would be possible or would the 90% LTV mortgage needed put lenders off considering we are already exposed through existing property?

Any insight would be appreciated :think:

thanks,

Caz3121

To have the current home/mortgage ignored for purposes of new mortgage you are likely going to have to move it to a BTL - this would entail getting the LTV down to 80% so based on a value of £155k then the max mortgage would be £124k so you would need to pay £16k down
Unless of course your combined income will support mortgages totalling £410k

Wh05apk

Caz3121 wrote: »

To have the current home/mortgage ignored for purposes of new mortgage you are likely going to have to move it to a BTL - this would entail getting the LTV down to 80% so based on a value of £155k then the max mortgage would be £124k so you would need to pay £16k down
Unless of course your combined income will support mortgages totalling £410k

Completely wrong!

Most lenders will ignore if "self funding" which will normally mean the rent will need to exceed the mortgage payment by a certain amount, otherwise they will take part of the payment as a commitment. Some lenders will also insist on the property having been rented for a certain period first.

Dave_Ham

Do not worry, the above post is not accurate.

Lenders will ignore on consent to let the monthly repayment be ignored in your circumstances.

Your issue will be that many lenders cap 2nd home mortgages (or 2nd ressie mortgages) at loan to value 85%

This is a broker case to be honest, as there are also other variables for this type of purchase..

Good luck

Philipth

I'm in a similar situation.

I purchased a house with my brother 7 years ago in the midlands straight after finishing university. It was in the days of 100% deals, the house cost £150k, we have 132k left and 17yrs on the mtg.

We've now both moved away from the area so are renting out the property (consent to let from bank). Rental income is £650 per month, mtg payment is around £850.

I now live in London (currently renting) and would like to purchase a property with my partner. Our combined base salaries are £138k and we're looking at properties between £350 and £400k.

Quick scans on first direct suggest we could borrow up to £550k as first-time buyers and we are debt free (£30k of student loans paid off, no credit card bills etc).

How much of an impact will my first property (now rented out, part-owned with my brother) have on me & my partner's chance of getting a mortgage in London?

Many thanks to all experts in advance!

Dave_Ham

Philipth wrote: »

I'm in a similar situation.

I purchased a house with my brother 7 years ago in the midlands straight after finishing university. It was in the days of 100% deals, the house cost £150k, we have 132k left and 17yrs on the mtg.

We've now both moved away from the area so are renting out the property (consent to let from bank). Rental income is £650 per month, mtg payment is around £850.

I now live in London (currently renting) and would like to purchase a property with my partner. Our combined base salaries are £138k and we're looking at properties between £350 and £400k.

Quick scans on first direct suggest we could borrow up to £550k as first-time buyers and we are debt free (£30k of student loans paid off, no credit card bills etc).

How much of an impact will my first property (now rented out, part-owned with my brother) have on me & my partner's chance of getting a mortgage in London?

Many thanks to all experts in advance!

Whilst the First Direct products are desirable and your base salaries are strong, I am not sure how First Direct deal with let out properties.

I would think you would be ok, unless you are borrowing right up to your limits..

I would ask them the question (without credit scoring you) to see if you fit their criteria. Do be mindful they are the strictest in the business.

If you need any help, just ask - may be easier to start a new thread though...

bring1t

Thanks for the replies, looks like the broker is the right route, when dealing with brokers is the recommendation to go face to face or can it be done over the phone remotely??

Dave_Ham

rm-lewis wrote: »

Thanks for the replies, looks like the broker is the right route, when dealing with brokers is the recommendation to go face to face or can it be done over the phone remotely??

Personally I see about 25% of clients face to face and 75% on the telephone remotely. Personally, I would rather see people face to face as it builds relationships and it is easier to communicate.

That said, a rubbish broker seen face to face is still not going to mitigate speaking to a good broker over the telephone..

Good luck

Philipth

Dave_Ham wrote: »

Whilst the First Direct products are desirable and your base salaries are strong, I am not sure how First Direct deal with let out properties.

I would think you would be ok, unless you are borrowing right up to your limits..

I would ask them the question (without credit scoring you) to see if you fit their criteria. Do be mindful they are the strictest in the business.

If you need any help, just ask - may be easier to start a new thread though...

Thanks for your comments & help.

I've spoken to both HSBC and First Direct this morning.

HSBC stated they will only allow a second mortgage if both properties have maximum LTV's of 80%.

First Direct said that for second properties, they will only consider rental income if it has been received for a period of at least 3 years. Otherwise, they will take the mortgage payment on the other property into account as a monthly outgoing, similar to other loans etc......

One other option is to transfer the existing mortgage to be solely owned by my brother..... I might start another thread to discuss that...