New Mortgage special case

MadCapHarry

I purchased a property with a repayment residential mortgage. My circumstances later changed and I moved out, and let the property with the full permission of the lender. I have been letting the property now for 5 years with the same tenants.

I have been renting since and now wish to buy another property to live in whilst continuing to let the first property. I approached the lender for my first mortgage and they say I cannot borrow for a new property and I can't transfer to a buy-to-let as they do not do buy-to-let mortgages nor do their parent company.

Any ideas as to what options I have?

GMS

Which lender are you with now? How long have they granted consent to let for?

What is the property worth? What do you owe on the mortgage? What rental income per month?

What is your salary?

How much are you looking to purchase a new place for and what deposit do you have?

hamster2013

try a different lender ?
not uncommon for people to have more than 1 residential mortgage, as long as you can afford it
banks dont like it as the interest is usually lower than btl mortgages, but if they allow it its usually with a surplus

no harm in trying to shop around and then contacting a different bnak

kingstreet

The questions GMS has asked are relevant.

If you need to borrow against the let property for the deposit on the new one, the value, outstanding mortgage amount and rental income are vital.

MadCapHarry

GMS wrote: »

Which lender are you with now? How long have they granted consent to let for?

What is the property worth? What do you owe on the mortgage? What rental income per month?

What is your salary?

How much are you looking to purchase a new place for and what deposit do you have?

The Derbyshire
They have never specified a period for how long the property can be let for.
Property value approx = £250K
Loan outstanding = £107677
Rental = £774.40
Current salary = £30K
New property price (approx) = £165K
Deposit = £30K

Dave_Ham

Get some formal advice, I would fancy there will be a solution here depending upon the detail.

Do you know what your current rate of interest is?

MadCapHarry

Dave_Ham wrote: »

Get some formal advice, I would fancy there will be a solution here depending upon the detail.

Do you know what your current rate of interest is?

Current (SVR) = 3.5%

Dave_Ham

Then as I sure you are aware, you need to work through the sums (or a broker does)

You will be weighing up the benefit of keeping your current (competitive rate) and raising the deposit elsewhere (which may sacrifice rate on new purchase) and changing to a buy to let and raising finance on slightly higher rates and a likely product fee addition to raise a deposit for the new purchase.

You possibly know this already, although still think it is achievable.

All the best

Crashandburn

With the current standard rate you are paying with a Derbyshire, you wouldn't see too much of an increase in this rate if switching to a buy to let in light of the value of your current property.

As others have said, you will incur certain costs for doing this but the reward may be a much lower interest rate on your main residential mortgage and so you would be offsetting an increase of say 0.4% on your buy to let mortgage against a 0.5% decrease on your residential mortgage.

Factor into this higher costs to offset against your rental income and you may be closer to an answer.

Good luck

MadCapHarry

I'm not tied in to the lender any more and am free to move without any early repayment charges. Therefore is it just a matter of finding a buy-to-let with a similar or lower lending rate and a reasonable fee? Or is it worth trying what hamster2013 says and keep it where it is and try another lender for the 2nd mortgage?