Advice on BTL needed please

eldaniel

Hi,
I wonder if anyone can give me good advice on that one. I am currently paying off my first mortgage. In near future (before I even pay off my 1st mortgage completely) I want to rent this flat out and buy a house where our family would like to move in. What type of mortgage offer do I HAVE to take? Or is it my choice? What I mean is - do I have to take BTL mortgage for my second property (assuming that I will live in my second property and rent out the first one)?
What I want to do is to take another mortgage before I repay this one, as soon as I manage to reduce mortage level to acceptable low level.
I understand I will also need consent to let form my first mortgage lender, but from what I gathered, if the mortgage left is quite low they normally give it to you.
Does anyone have any experience in making similar decision? I hope I did explain it in a way that someone will understand.
Also am I not risking a lot by doing so? Because I can buy nice house where we would move in, but if my bank won't give me consent to let I will be with 2 mortgages and no option to rent out.
Many thanks for your help,
Daniel

kingstreet

No. A BTL mortgage is used for the property to be let, not for your new main residence. You should obtain consent to let from your current lender, then apply for a new residential mortgage on the new main residence.

The only times you'd need to consider a formal BTL product is if;-

1- your existing lender refuses consent to let
or
2 - you want to remortgage property one and raise money for the deposit on property two.

eldaniel

Then what I do is:
1. I get consent to let.
2. Take new residential mortgage on new property.
3. Rent out the first one.
is it really as simple as that?

Now the question is how easy is to get consent to let. Do the banks have like a set criteria over that?
I am going to do that probably when my LTV (after redawing deposit) will be lower than 30%.
Ideally what I would like to do is to redraw some money from my current mortgage and use it as a deposit on second property. But I am not sure to what level of LTV I can redraw to still have a chance to get consent to let.

If they give me consent to let, can I still keep the existing mortgage with them. It is really important to me because I have fantastic very flexible mortgage.

Also what are my options if they refuse me right to let.

Many many thanks in advance

Thrugelmir

Unlikely you will be granted withdrawl of equity for the purpose of a deposit on another property.

Consent to let is only a temporary arrangement, i.e. 3 years. So isn't suitable if the property is to be held longer term.

Thrugelmir

eldaniel wrote: »

Also what are my options if they refuse me right to let.

CTL is at lenders discretion not a right. So you'll need to think along different lines. Perhaps by selling the property off. Then investing when you have more capital.

eldaniel

Thrugelmir wrote: »

Unlikely you will be granted withdrawl of equity for the purpose of a deposit on another property.

I have an offset mortgage (interest only, but I think all offset are interest only(?)) with option to withdraw overpaid capital, so I assume I can withdraw £x overpaid without bank asking me a question what for. I did that in the past in small amounts to put money in the savings which gave me better return than overpayment. Obviously for deposit I would have to withdraw bigger amount 10-20k, but still I think I can take back any overpaid amount and use it as I wish. Is that not correct?

Many thanks

eldaniel

Thrugelmir wrote: »

CTL is at lenders discretion not a right. So you'll need to think along different lines. Perhaps by selling the property off. Then investing when you have more capital.

Would porting my current mortgage (which is excellent and would like to keep it) onto new property and getting BTL on the old property be an option?