Applying For Mortgage On Second Property Help

starsky27

Hi all,
I'm looking for your opinion on whether we will get a mortgage given our current circumstances. We have owned a property for ten years to which we have a mortgage of £85,000. We will be looking to let that out and purchase a second property in the region of £300,000. We have a 15% deposit for the second property. Our combined salary is £99,000 and we have good jobs held for a long time. As far as we are aware our salaries should enable us to borrow enough money to do this. The problem I can foresee is to do with my partners credit file. She currently has a score of 911 (which I know is not really a indicator of whether a lender will lend). On her file are these areas which could create a problem ,

1) Two missed payment markers in the last year and four in the last two. This was completely her fault as she initially paid the £10 instalment by phone and kept missing the due date( when I found out I was not impressed to say the least..). She has for the last 8 months paid by direct debit and been on time.



2)10 years ago whilst a student she got into financial difficultly and entered into a DMP. The remaining four accounts from the DMP on her credit file are showing as Satisfactory( as are all her closed non-DMP accounts) and where settled up to 2008.

Would we be able to get a mortgage for what we want with my partners credit file showing these things ?

My credit file is squeaky clean which make my partners discrepancies even more frustrating. In fact I can safely say that this one issue has caused more friction in my house than anything else. We have saved for a long time to be in a financial situation to be able to get two properties and now I'm worried our future has been jeopardised because my partner forgot to pay a £10 bill on time....

Any advice would be appreciated .

Thanks,
Mark

Dave_Ham

Hi Mark,

Try not to be too hard on your partner, its sloppy rather than malevolent.

You are still highly likely to get a mortgage, although the late payments within 12 months will preclude some of the absolute top tiered rates..

May be worth getting Equifax credit file too, see how the old DMP details transcribe on there and then may well be useful to get a broker to optimise the rates achieved.

Best of luck

starsky27

Hi Dave,
Thanks for the quick reply.
Of course you are right in regards to my partner and point taken.

I really hope your right about getting a mortgage as I have been worrying myself with this since finding out about my partners file.

I never thought of looking at any other credit agencies, thanks for the tip.

Cheers,
Mark

Dave_Ham

No worries,

Honestly think you will be fine, just need to ensure the lender approached is relatively flexible...

starsky27

Thanks for that, you have settled my nerves somewhat ..

Cheers,
Mark

PierremontQuaker03

Please note that your 85k current mortage will be transfered to a buy to let mortage, which will mean a heft arrangment fee (around the 2k mark) and you will also pay higher interest rates with a BTL mortage - the banks are very crafty in getting money from you

kingstreet

PierremontQuaker03 wrote: »

Please note that your 85k current mortage will be transfered to a buy to let mortage, which will mean a heft arrangment fee (around the 2k mark) and you will also pay higher interest rates with a BTL mortage - the banks are very crafty in getting money from you

Not necessarily.

The OP needs to ask the current lender for consent to let. This may, or may not be granted. For example, First Direct does not grant consent to let as a matter of policy.

A lender granting consent to let may require a change of rate, or payment of a fee, or both. Another lender may grant consent with no alteration to the current mortgage terms.

If the borrower has no alternative but to remortgage to a BTL product, perhaps through refused consent, yes, a fee may be charged and the interest rate may be higher.

In each case, a lender may impose a rental income requirement of around 125% of the monthly mortgage payment, at a rate of as much as 7%pa, have a maximum loan to value on the current property and, in the case of a BTL product, insist on a minimum personal income.

starsky27

Hi there,
Thanks for the reply.
I was hoping with our combined salary to first try for two domestic mortgages. I have spoken to my current lender who I have been with for ten years regarding letting the property out. They also calculated that on paper our salaries would enable us to lend enough money to do this. The problem we would have I think with them( Chelsea) would be the recent problems my partner has had and because of this I will seek out a broker to for the second mortgage. If for some reason we can't do both on a domestic we will be forced to go down the BTL route.
Thanks,
Mark

starsky27

Chelsea do consent to let. They require a letter from a estate agent and there is a £100 fee. They also add 1% onto the interest rate I have with them which would make my rate 4.19. This I believe would be the cheaper route if the consent to let on my property which I can't see any reason why they wouldn't.