Buy to let Mortgage needed? Advice

gr7ace

Currently I own half of a property worth £150k, with £129k left on (just under 24 years left). The other half is owned by my Ex girlfriend.

One of us is going to buy the other out of the property and then rent it out. We did live in it together (whilst I was there); however I had to move away (as I'm in the military) and our relationship broke down (that's another story!).

What I want to know is what are our options with regards to the mortgage? Currently it is on a 4% fix until Jan 15, with a £3900 early repayment charge. Each monthly mortgage payment is £707.

My Ex has been to see our current mortgage provider and they said we could move to a buy to let at 6.8%, a £700 fee with each monthly payment of £896. Either of us could afford that, but I'd want it to be as low as possible?

Should we look at other providers? The comparison sites don't show any buy to let mortgages for that high LTV ratio.

A friend (who is in the military) said his mortgage provider allowed him to stay on a buy to own mortgage, when he moved away has anyone else heard of that kind of allowance by mortgage providers?

If I've missed any details please let me know. I'm keen to get the lowest mortgage in a difficult situation.

gr7ace

Been reading a bit more online. Is consent to let an option? Until the fix runs out in Jan 15?

The mortgage provider is Darlington BS.

dimbo61

You need to ask the Darlington for consent to let for a period of time 1/2 years and once out of the fix sell the property.

ViolaLass

dimbo61 wrote: »

You need to ask the Darlington for consent to let for a period of time 1/2 years and once out of the fix sell the property.

Or get a BTL mortgage - they don't HAVE to sell.

kingstreet

There isn't enough equity to remortgage to a BTL product now.

Best they can hope for is a TofE to transfer off the leaving party and consent to let.

All at existing lender's discretion.

gr7ace

I wasn't the one that spoke to them, so guess I'll need to do that next time I'm up north. CSL for 1/2 a year would be better, then re mortgage for letting after the fix is up.

Once the LTV ratio has gone down. I think I could get it to 80% by then, if I scrimp and save (assuming I took the property).

dimbo61

Your EX girlfriend wants her Half of the equity in the property so £10,000 and you need 75% LTV to get a BTL so if the property is worth £150K you need to have a Deposit or equity of £37,500 after paying your EX her £10K.
You have around £10/11K of equity right now
Any idea where you can get £25,000?
If not ask for consent to let from Darlington untill Jan next year then put on the market and move on with your life.
You may well make a LOSS on renting if you get a BTL at 6.8%
Interest only BTL at 6.8% on £113,000 ( 75% plus £700 fee) works out at £640 just in mortgage payments !!!
What will the property rent out for ?
Remember letting agents fees, landlord insurance, gas safety check, repairs and maintence, advert ETC

Katgrit

I could be wrong......and I don't know where I read it....but I'm sure military personel have some different rights with regards to BTL. Whether its not needing CSL, or having different tax breaks I can't remember. Sorry I've not been much help. Maybe someone else will come along who knows what I'm waffling on about!

Maybe ask on the Armed Forces moneysaving bit of the forum.

gr7ace

The property would get about £650 a month, 10% would go to the estate agent to manage it on my behalf. So I'd be making a loss on 6.8% at about £300 a month. I could afford that and be able to over pay by quite a bit each month.

I could take a loan from my bank (I get offered loans when I log into my internet banking all the time).