Letting a Negative Equity property

kingstreet

A buy to let product normally tops out at 75%, maybe 80%, in the odd case.

That means they would be giving up around 25% or more, to get rid of you?

Can't see that happening. Sorry.

£100k value x 80% = £80k max BTL remortgage

£108k - £80k = £28k, or 26% reduction in mortgage balance needed.

ChampagneFever

So i can basically rule out switching to a buy to let mortgage. Think it'll be another 10years till the mortgage value drops to 75% house value.

Other thing is my mortgage will be on a variable rate, if interest rates go up, im not in a position to get a new fixed mortgage.

Caz3121

how did you deal with your current mortgage on the mortgage application for your house with your girlfriend?
Have you been declaring your rental income for income tax?

ChampagneFever

We told the advisor that we had a mortgage on a property which we let out, we told him the situation and he didnt say anything. He said the new mortgage is based on your affordability.

Yeah I've been declaring the rental income for tax purposes.

kingstreet

ChampagneFever wrote: »

So i can basically rule out switching to a buy to let mortgage. Think it'll be another 10years till the mortgage value drops to 75% house value.

Other thing is my mortgage will be on a variable rate, if interest rates go up, im not in a position to get a new fixed mortgage.

You can ask the lender if it has any customer retention products for existing borrowers whose deals are ending, but your comment about them wanting out of the UK suggests you'll be on SVR, or nothing.

ChampagneFever

Due to the situation, would I be best to have a financial advisor get involved? So they can communicate with the lendor to get the best possible outcome. Plus how much are advisors these days?

kingstreet

TBH there's nothing here you can't do yourself.

A broker is more useful in the time you are trying to get a mortgage. The after-sales stuff is normally borrower to lender.

ChampagneFever

Im just wary i'll say something which will make things go badly wrong for me. Possibly worse than they are currently with this situation.

ChampagneFever

Quick recap of the comments posted. It appears my best option is to inform the lendor that I want to let the property and hope they allow me to continue as things are until out of the negative equity period.

If they dont then I am up the creek without a paddle.

holly_hobby

I can't see them giving you any kind of retention product IF you obtain CTL - which is imperative for you to seek.

Neither can you remortgage onto a BTL mge, because as per my first post, your negative equity and lack of capital to reduce the borrowings (to meet BTL requirements min 20% free equity), completely rules out any BTL finance (or even a residential remge for that matter).

So you are stuck where you are, hopefully they will agree to your CTL request (svr & a loading circa 1%) given the financial circs currently surrounding your property, which you are tyring to manage.

Don't forget as a leasehold flat, you need the permission of your freeholder too.

Hope this helps

Holly