Accidential Landlord query..

dave333

We tried to sell our house earlier this year but failed to sell at a price we could afford. We are now looking into renting out our house and purchasing a new house.

Our current mortgage is with Nationwide and we can convert this to a buy to let mortgage (with a 1.5% increase in rate and £30 fee).

For the new purchase, if we were to mortgage with Nationwide we would have to have been letting out the property for 1 month in order for it to be treated as 'self-funding' and therefore not be included in the affordability calcs. They also require an 85% LTV where an additional property is owned. This 1 month condition is a bit of a pain as we would have to live with friends/family for a month before buying the new house..

I am therefore looking at other mortgage providers for the new purchase, ideally 90% but we could go to 85% LTV if necessary.

My questions are: How do other banks treat additional buy to let properties? Are there any other banks/building societies you would recommend for our purposes?

I'm just looking for some pointers as to which banks I should look into, I'm happy to do more research but any help anyone can provide would be great :-)

Foxy-Stoat_3

Normal BTL mortgages want 25% minimum deposit, look on compare the meerkats for comparisons.

dave333

Thanks Foxy-Stoat, its not actually a buy to let mortgage we need. It'll be a mortgage for the home we're moving in to. We can convert our existing mortgage to buy to let..

GMS

How much will the new mortgage payment be on the current property when converted to BTL and how much rental income per month?

90% LTV for a second property is not for all lenders.

There are some about. A broker could be useful for you here.

dave333

Mortgage would be £270 for the first 6 months then up to £433. Rent should be £600-650 so will meet the 1.25x criteria.

HSBC also do a 90% mortgage but I can't see on their website whether they have restrictions if you own a second property. I'll probably have to give them a call but wondered if anyone had any experience of renting out their house for the first time and buying a new one..

Thanks for your help.

holly_hobby

HSBC (direct business only) will include the BTL commitment within the affordability calc, and restrict LTV - so they may not suit.

If you have a tenant ready for placement under an AST, and the property will be totally self sufficient, then there are lenders whom will set aside the commitment from their affordability calcs, and will treat your app for your new primary residence on a standalone basis .... an experienced whole of market broker will be aware of those fitting the bill, and I would encourage this rather than you directly submitting applications willy nilly with lenders, until you stumble upon one that fits ....as multiple credit searches will hinder rather then help your cause ....

NB - Dont forget to effect landlords ins for your BTL unit.

Hope this helps

Holly

dave333

Thats great, thanks for the information.

How do HSBC take the BTL into account, do they simply deduct the value of the mortgage from the total they would lend?

Do you know which lenders would set aside the BTL commitment?

I don't want to apply randomly, I will research them first - I just thought there may be someone who could suggest a couple of lenders to look into.

Many thanks

holly_hobby

Dave please engage a broker to assist with this.

Each case is independently assessed, and there simply isn't enough info here to give any kind of guidance as to whether the figs will stack up or not, nor is the board allowed to recommend as a whole in any event.

If trying to avoid a broker fee, then you may be able to negotiate with your broker for they to operate on a supplementary commission and proc fee basis, as oppossed to a straight prof fee from yourself.

Hope this helps

Holly