Buy to Let Mortgage with poor credit

smerch1468

I have a property which I jointly own with my ex, she wants me to buy her out and have the property in my own name.

I have a poor credit history. Never had any defaults or ccjs but lots of late payments on credit cards(no more than a few days late so down as 1 on credit file). I worked out 4 in the last 6 years. For the last few years I have been paying all credit commitments on time but have due to loss of job (twice), gone over credit limits for cards more than once.

This is my current situation. I have £10k unsecured debts across two cards with a total limit of £11,300. I have a mortgage for £178,000 against a property with a value of £270,000. I also have a share in a second property which has no mortgage and equity worth approx £135,000 (it is joint owned with my mum and sister whose share is the same).

My mum will give me the cash to buy my ex out but my credit card debt will probably remain whilst I pay it off over the next 6-12 months. My ex isnt giving me the time to pay off my debts so I need to try to get a mortgage asap. I don't earn enough to take on the mortgage as a residential and move back in but want to look at buy to let. My salary is £35k with no bonuses.

I have a sitting tenant who pays rent of £1600, the current mortgage is £680 interest only, so the figures stack up. What are the chances of getting a buy to let mortgage perhaps near prime? Would someone like precise mortgages look at my situation?

smerch1468

Any thoughts from the mortgage experts please.

EMac_2

I would suggest you get copies of your credit files to see exactly how your payment history looks and go see an independent broker. Precise and others may look at this but if you only need the 10k to pay off credit cards, i.e. mum is paying off the ex then maybe a secured loan on the b2l would be an easier option and let you keep your current interest only rate. I assume you have obtained consent to let from your current mortgage provider. Best of luck

Dave_Ham

Vote 2 for a broker being required...

This sounds like there may be solutions, although without more detail virtually impossible to say further.

Good luck

shortchanged_2

Sell up, sort yourself out and move on.

kingstreet

Which property are you trying to remortgage?

And if you get a BTL product where are you going to live?

smerch1468

Many thanks for the responses, I will try to answer the questions now:

1) Emac, Dave Ham, I have a copy of my expedia credit report thats where I got the info with regards to late payments etc. By the time we get to 2016, most of the late payments will drop off, the only misdemeanour will be going over credit limits/overdraft limits which I know isn't clever but I am more disciplined now than ever. Yes I got consent to let from BOI, they have allowed 3 years which gives plenty of time just ex wants to move on which is fair enough. The rate is the same as for residential, so to compare with most BTL rates this isn't bad. I have access to an IFA who also specialises in mortgages, he is recommended by moneyfacts and knows his stuff so I will speak to him over the next few weeks. Emac I will talk to IFA about rolling credit cards into BTL if possible, this will mean higher LTV, £189,000 mortgage vs value approx £270,000 so not sure how this affects things.

2) Shortchanged. If I sell up, I have a 4 bed fully furnished property, and cant afford a 1 bed flat in the area where I live now! Also I have spent an absolute fortune on the BTL property, it makes sense to keep it use the surplus rent to reduce the mortgage and eventually move back in. So your suggestion is not a good option for me.

3) Kingstreet, I am looking to remortgage the property I lived in with my ex from a consent to let in joint names to a BTL in only my name. I am presently living with my mum, but will eventually move out. I have a two year plan when I expect to be on a salary that will support a residential mortgage of the amount required and have a much improved credit file by then. I have no intention of asking my mum to sell to gain access to my equity in what effectively is her family home. It will be a tidy inheritance for me and my sister.

smerch1468

http://www.precisemortgages.co.uk/wp-content/uploads/Precise-Mortgages-BTL-Product-Guide.pdf

Precise are talking about defaults rather than missed payments or over limit issues. Does that mean that I would potentially be considered for this?

smerch1468

Sorry to bump this again, but to the original reply's. I assume some of you are mortgage advisers, please can I have your thoughts. There are some btl lenders that do soft credit searches, is that an important part of my search?

smerch1468

I spoke with a mortgage adviser today, he says with my existing AST in place and secure rental of £1600 pcm, I should qualify for one of the better rates on the market.

He sourced principality at 3.89% BTL discounted variable which would roll my existing unsecured debt into the mortgage, and interest only costs would be less than I am paying right now. LTV is 70%. That means a massive surplus of rent over mortgage, even after letting fees, insurance and tax. I aim to put surplus cash on deposit until its remortgage time in 2 years.

I told him about my late cc payments, he said as they where more than 2 years ago it shouldn't be a problem. I just hope this goes through. What do the other advisers think?

Dave_Ham

On the face of it this sounds ok, if your broker has assessed your circumstances and you are happy to proceed then go for it.

Just ensure your broker does not charge a fee if you are unsuccessful..

Best of luck