Remortgage for BTL?!

wbcoms

Just wanted some general pointers if possible :A

We bought our current house last December. We paid £177,000, and got a 90% mortgage (£160,000).

Now, I've got a fantastic work opportunity for one year in Australia from this September. Would love to go, and would be gutted if it didn't work out for any reason...! :j

This morning got a letter from mortgage company saying they will not give a consent to lease because this particular type of mortgage does not have that feature. As far as they are concerned, only option is for me to sell the house by September - they have even included a SAE for me to tell them that I am selling the house and repaying the mortgage :eek:

I want to let the house out during this year away, because we are coming back to my current workplace and the schools are great in this area. We are happy with the house and don't want to sell it.

What are my options? Is it a simple matter of shopping around for the best remortgage deal and switching to a different lender - one that will give me a consent to lease. Or should I look for a specific BTL mortgage?

How does the process of switching mortgage work? Do I have to get an estate agent to come round to give a price on the house? I don't have much cash sitting around - all my money is tied up in the 10% of the house.

Lipstick_2

Hello. Take care as anything that you do from here has to be well thought out.

The actual remortgage process would be painless and does not need to cost you any money at all (or very little)

Here are some potential problems for you to consider:

1) You have pre-warned your existing lender of your plans and they are not happy with it

2) If you do remortgage, you would need to arrange a mortgage with a lender that would allow you to obtain a consent to lease.

3) If you went for a buy to let, the rental income would have to be assessed and at least match the mortgage payments.

Your post could open the flood gates for a big debate on here from all the advisers having an input plus past and present buy to let landlords ....

Let's go for it.....

Luv

Lipstick

Mr_helpful

Do you have any redemption penalties? if no you could remortgage to a buy to let but in present conditions and the LTV you may struggle to get the rent to stack up. I would get some rent assesments from local estate agents and then discuss whether feasable with an independent broker. If answer is no I would still rent the property. as long as the mortgage is paid the lender cannot do much about it apart from refuse to recognise the tenancy which isnt going to affect you. Then when you can change the mortgage do it.

wbcoms

Thanks for the advice!

There are no redemption penalties. You are right, looking at the rental incomes in the area, the rental income would not pay for the mortgage payments. However, it would hopefully go some way to helping me pay the mortgage while I am away.

Rick62

Certainly there is no need to sell the property. You don't say if there are penalties if you redeem the mortgage early, these could be up to about 5% (generally).

You should get a BTL mortgage or a consent to let, as you are coming back in a year what you really need is just a consent to let or you could face the opposite problem when you come back.

If I were you I would speak to Cheltenham & Gloucester, their rates for residential are OK, their rates for BTL are some of the best and they can do BTL lending based on your income and generally make less distinction between BTL and residential than other lenders. I would aim to get a residential mortgage from them but wih the consent to let discussed and agreed upfront.

wbcoms

What exactly is the process for remortgaging? When I find a mortgage that is right for me, what happens next?

Also, will I have to put more cash into the new mortgage, or will they accept the difference between the current mortgage value and the value of the house as suffficient "deposit"?