can any IFA's advise please

alm721

Firstly I have posted this in house buying before I saw this forum. I think this may be a more appropriate place to post so ap[ologies if you've already read this but I would be grateful for any advice anyone can give.
Thanks

We are wanting to put in a bid on a property that is being put out to tender. We currently own our main property with a value of around 270K and a smaller property worth around 115K. We were planning on putting in a bid for around 300K on the property we want. The prolem is this. We have a mortgage of 85K which is secured against our main residence but which was taken out to buy the smaller property. We did it this way because we wanted to have the cash to be able to buy somewhere quickly when we saw somewthing we like and it was cheaper than borrowing on a buy to let mortgage. There is no mortgage on the smaller property. We have spoken to an IFA and they have found us a mortgage for around 250K asgainst the property we want to buy should we get it however they have said we will have to change our current mortgage to a buy to let mortgage in order to be able to get the 250K mortgage from the other company. I understand the reason for this but its going to cost us 1300 to get out of our fixed traker (runs out in October anyway but they wont shift on price) The fees on the buy to let mortage to replace the one we have are around 1200 in total so it will cost us around 2.5K just to change to a buy to let. Is there any way around this. Can we say the mortgage ios technically a buy to let even though it not secured agaist the house we let out. (It was taken out for that pourpose) or does anyone have any other advice.

Many Thanks in advance

herbiesjp

Can you not get consent to let from your existing lender - so you keep your current deal and need not pay any exit fees

Has this been suggested to you?

alm721

Thats a good question, I did get consent to let from my current lender yesterday and have yet to hear from my IFA whether this would be acceptable. I wonder what anyone else thinks?

JoeK_3

It could be that your incomes aren't sufficient for both mortgages.

Unfortunately, this information has not been posted, so we can't comment any further.

JoeK

alm721

Hi there, this is part of the problem althouth we can afford the payments. Its complicated as my husband is self employed and has been a none profit sharing salaried partner in his dads firm for the last 20 years. His dad has now retired and my husband became a sole trader in Feb this year. In addition the last few years business accounts show a loss mainly because 2 shops were not doing well and my father in law tended to pay for things with the business account that prehaps he should'nt have done! Things are ok now as shops have been sold etc but obviously for this reason we will have problems, therefore the IFA chose the mortage on the new proprty with a firm which will not check our income and will go on the equity in the property. Our intial mortgage though is with Nationwide and when we took this out I believe we only used my wages to work out if we could afford it, again as problems with my husbands money. Whether all or any of this will affect the applications Im not sure.

JoeK_3

So, what's the question?

JoeK

alm721

Sorry if this is not very clear its begining to confuse me. Question is do we have to change our current mortgage to a buy to let in order to borrow the 250k on the new property. We could prehaps move our existing mortgage but Nationwide who we are with will want past business accounts which will not allow us to get the money we need, hence the needing to go with another firm for the new mortgage.
Thanks

herbiesjp

Answer is - get consent to let for your current deal

Then you can look at a new residential mortgage with a lender that will "ignore" the property in the background and allow you to utilise 100% of your income for the new property

silvercar

If you are selling your current main residence and it has a mortgage secured on it, that mortgage will either have to be ported to your new place or redeemed; you cannot sell a property and leave the mortgage on it.

alm721

Hi there, the intention is to clear the mortgage on our current property when we sell it and use the remainder to pay off some of the new mortgage so thats not a problem.

herbiesjp

MAke sure the sale goes through after the current deal/penalties expire on your current property.

Also make sure that the new mortgage on the new property allows for large lump sums to be overpaid into the mortgage

Hopefully this is being advised to you

HTH