pre fab mortage on temp contract with consent to let?

Brallaqueen

Would it be possible?

I own a flat. I would like to put this on CTL and buy again. Halifax mortgage, on SVR of 3.99

I have seen a pre fab bungalow that I would like to buy. It has been clad and re-roofed in 2000. Asking price 114,000.

I work as a temp in financial services (PPI) since 12 Nov 2012 and current contract ends September 2013. I would expect it to be renewed until june 2014 as 18 is max length of contract. I earn 308pw net (approx 19700 gross).

I have 10k deposit currently, and able to raise additional funds through working overtime, family etc to make a 14k (10%) deposit.

Is it a pipe dream?

jamesd

Yes, it's a pipe dream.

Consent to let is temporary based on needs like having to work overseas or in a different part of the country or being unable to afford the mortgage and forced to let the property. Buying another property just because you want to is extremely unlikely to be an acceptable reason for consent.

A BTL mortgage is an alternative but appears very unlikely given your income, even if the rent easily covers the mortgage payments.

Thrugelmir

You are better off paying down your current mortgage.

Brallaqueen

Thanks all!

There is a reason for buying a bungalow - my mum is going blind (retinal tear cause her to lose sight in one eye, now compounded by macular degeneration in both) and in the near future will not be in a position to live without help and support. I guess that wouldn't be enough reason to explain the CTL to a lender? My flat is not suitable for her as it is not ground floor and her bungalow is a one bed so no room for a live in.

kingstreet

Halifax routinely grants consent to let, as long as you are prepared to accept one if its three year CTL products at 5.49% with £999 fee, in return.

Assuming the new property is mortgageable, you'll need a new lender prepared to accept the current property/mortgage in the background, which some will do as long as they consider it self-financing. A lender taxing you the existing mortgage payments will see the plan fall apart.

The deposit won't be big enough for many lenders, as a second property sees the likes of Nationwide top out at 85%.

Ensure any new lender will accept your contract situation. This close to expiry, you'll need to renew again before being able to proceed.

Finally, the income you are declaring may not be enough for the amount you need to borrow. One lender's affordability calculator is returning £83,000, assuming a decent term and no dependents or credit commitments, leaving you needing to purchase for around £97k.

Brallaqueen

A big thank you to everyone who has replied - all the information supplied has been very helpful and informative and I appreciate it.