Buy-to-let mortgage, any advice?

thep0ps

Hi there everyone,

Hope someone can help I'm new to the forum and have a really complicated situation.

I have read some guides on here which are great and very informative but can't specifically answer my question.

I am hoping to buy my ex-husband out of a property we own together. He doesn't want to buy it but it unfortunately won't sell.

I currently work and live in Edinburgh and have done for 3 years and the property is in Sheffield. The property is valued at £100,000 and my ex-husband wants £15,000 to buy him out.

Questions?

1. Is a buy-to-let mortgage at 85% possible? I have found only one company offering it called Turn Key Landlords but they claim to be regulated by Financial Conduct Authority but not the Financial Service Authority. Do I have my wires crossed. Any info on this company?

2. Is there an early re-payment fee with all mortgages as I may sell in one year if the market recovers?

3. Any other advice, can anyone see an alternative to this?

I can't move back to Sheffield and the property is currently empty.and we are paying the mortgage and rent on our current living situations which is crippling and so I would like to put someone in the rent to pay the mortgage as soon as possible.
We have had no offers on the property for 4 months and reduced the price significantly.

Thank you in advance for any information or advice.

Belinda

GMS

1/ Financial Conduct Authority has replaced Financial Services Authority.
2/ Product specific.
3/ Have you asked for Consent to Let from current lender? Will not release funds but could allow renting of property to potentially cover mortgage. Alternatively sell for less in order to release liability

jamesd

You also have the option of going to court to get an order forcing sale of the property. Bit surprising that wasn't done as part of divorce proceedings.

thep0ps

Thanks for the information so far guys. Very helpful to know the authority has changed name!

The divorce was amicable so my hand isn't been forced as such.

I want someone to rent to cover the mortgage but my ex-husband doesn't, he thinks the house is more attractive to buyers if it's empty.

We have had a 2 month break on mortgage payments organised through the bank but this is up at the end of this month. The house won't sell even with a massive reduction in price. I figured the house market may improve next year when the government introduces the new 40% interest free loans to first time buyer (anyone heard of this??) so wanted to wait for a good sale then. On the other hand my ex-husband is stuck with increasing debts and can't wait any longer for the money even if it's not what he originally put in as the deposit when we purchased the property.

So I was thinking the only option is a buy-to-let mortgage but needed a good release of equity to buy my ex out. Is this the only option? Does anyone know of any banks/building societies/other companies offering LTV at 85%? Most are 75%. Would anyone suggest taking a loan out and just transferring the mortgage into my name? Is this too big a gamble and commitment?

Thanks in advance

Belinda

jamesd

He's right that the house is more attractive to buyers if it is empty, unless it is being sold to BTL investors, who will probably prefer having a tenant in place. But a BTL investor is more likely to want a lower price, so best not to do things aimed at them.

Letting it seems like a reasonable solution. If your ex is stuck with increasing debts it is possible that eventually a creditor will place a charing order against the property, since part of it is one of his assets. Useful for you to eliminate that risk of possible forced auction or low price sale.

Be sure you get good current valuations so you don't end up paying your ex more than the actual market value, the one below the asking prices it is still not being sold at. It's not a particularly bad risk if you are paying your ex a fair market price. The failure to sell so far suggests that he has an inflated view of what it is worth.

Dave_Ham

Hi Belinda,

A lot of the opinion on here will be dependent upon your current lender/rate.

It would probably work out more cost effective to take out an unsecured loan to discharge your Ex, but no-one knows if your current lender would entertain you as a sole applicant, discharging your Ex and importantly allow an almost immediate consent to let.

Outside of this, there are a couple of companies who would lend at 85% although heavily dependent upon your situation as these are not commonplace and certainly not the cheapest products out there.

I would suggest you engage a professional and have a chat and give all of the information available.

All the best

thep0ps

Just wanted to update everyone and thank them for advice.

I've applied for a buy-to-let mortgage with my own bank which has worked out at not that bad an offer.

As luck would have it the property was valued higher than expected, releasing enough funds to pay my ex-partner but leaving me with an okay amount on a new mortgage. The rental income will exceed the monthly mortgage + insurance.

When at times it seemed hopeless it's all worked out in the end!

Just incase someone is reading this in the same situation I would advise:

1) Read around on this website and ask for help! Everyone has been very informative!

2) Keep in mind it's only money - be fair with an ex-partner, as long as you can manage with what you have left forget the rest - it will cost time and worry!

3) Approach your bank but also other potential lenders - there will be a deal for you out there!

Thank you everyone!

Belinda