Advice needed - borrowing on a property with a tenant in it

sancogs

Hi

I own and rent out the property next door to me (bought outright and I've never had a mortgage) and I would like to get a mortgage on it. I can't get a mortgage on the house that I live in as it belongs to my father.

What I would like to know is, can anybody suggest the first steps I need to do and what sort of mortgage to apply for, also would a valuation be needed to be done, I'm looking at borrowing £35,000 and the property was originally purchased for £90,000 three years ago but completely gutted and refitted out and similar houses on the road are approximately selling for £130,000. The reason I'm asking this is that I don't want the tenant to know that I want to borrow on the house as (a) it's none of their business and (b) it would freak them out as they would then think that I was selling the house which I not planning on doing.

I'm employed and currently earning approximately £23,000 after tax.

Hope this makes sense and any advice would be appreciated. Thank you.

Foxy-Stoat_3

Try a broker or take out a secure loan as the LTV% is very low.

GMS

Is the property attached to the one you live in?

Being next door is a no no for some lenders.

Definitely a broker case as many BTL lenders are broker only.

pcgtron

Just for your information, I'm going through a BTL remortgage at the moment and I had to get my tenant to sign a form saying that they were aware of the mortage application and that they had no formal right of ownership of the property. I'm not sure if this is normal but was not a problem in any way.

I just asked them to sign the form, assured them I wasn't selling the house and moved on

David_e

sancogs wrote: »

The reason I'm asking this is that I don't want the tenant to know that I want to borrow on the house as (a) it's none of their business and (b) it would freak them out as they would then think that I was selling the house which I not planning on doing.

Won't they wonder what the valuer is doing when he/she goes round the house?! You'll not get a mortgage without a valuation even if it's a low LTV (to the best of my knowledge and experience).

amnblog

Hello Mr Tenant - Just to let you know that I have decided to keep hold of the property and available to you for rent and am therefore raising some funds against it.

The lender will be in touch and may ask for a valuer to obtain access to the property - if they do so could you oblige.

MonsieurFrugal

GMS wrote: »

Is the property attached to the one you live in?

Being next door is a no no for some lenders.

Definitely a broker case as many BTL lenders are broker only.

Why is that? Surely it's a completely different property what difference does it make. (Just curious as I think it's daft)

GMS

MonsieurFrugal wrote: »

Why is that? Surely it's a completely different property what difference does it make. (Just curious as I think it's daft)

Possibility of knocking through. Back door way to a residential maybe?

Whatever the reasons it is a lenders choice regardless of how daft people think it is.