Buyer pulled out last minute - advice needed re let to buy...please!?

ToriE

Hi All, I too have been a lurker and learnt alot from these forums without the need to post ...until now!

A bit of background ... I am in the RAF, hubbie came out a while back to provide stability for our 2 young children. We have been fortunate enough to spend the vast majority of our time together as a family and that is the most important thing in the world to us, so...when I was posted again (hopefully for the last time!) we decided to make this our last ever move and my hubbie got a good job near my new base which is close to family and we put an offer in on what was to be our 'forever home'.

Yesterday, the day before exchange, our buyer pulled out and given the short timescales and not wanting to loose out on the house we have had an offer accepted on, someone suggested we look at getting a buy to let on our current property and port our current (Tesco) mortgage onto our new primary residence .... having spoken to a broker yesterday he said it was all possible, however I have to wait until teh 25 Jun for a telephone appt with our current lender to inform them of a change in circumstance ... .I was hoping someone would be kind to have a look at the figures and save me from 2 weeks of sleepless nights and days of worry.

Current property - value £825,000
Current Mortgage - £206,000

New house - offer accepted at £490,000 (we were going to rennovate/extend)

Buy to let mortgage required - £400,000 (for necessary work on new house)

Renatl value of property £2750

My salary £57,000
Hubby salary £45,000
Hubbies military pension £15000

We are squeaky clean when it comes to credit (have a card but pay it off monthly), no loans etc - we have worked hard for what we have built up - I'm too financially risk averse to risk loosing it!!

Slight issue was that the broker said they wouldnt be able to take hubbies pay into account as he will be starting a new job!

To me the buy to let looks massive but the broker said it was self-financing and suggested a 2 year fix with Birmingham and Midshires (monthly I/O repayment £1050) - I am just sooooo worried that Tesco will refuse to post the residential mortgage because of the buy to let.

Any comments/advise gratefully recieved ....there have been enough tears so if its bad news give it me straight - I'm all cried out now!!!

kingstreet

Most lenders will only port the rate from a mortgage repaid by a sale, not from a remortgage. They may allow you to choose a new product instead

Only your lender can answer this.

ToriE

Thanks kingstreet - I have a telephone appointment with my current lender on 25 Jun (the earliest they had!) - I think what you are saying is that because we may not actually be selling our current property they may now allow us to port to a new primary residence?

We are at in the first year of a 5 year fixed so the ERC would be quite hefty ...:(:(

amnblog

Were you not porting the current mortgage when the intention was to sell?

Cornucopia

I can understand why you want to do this, but putting up such an expensive property for letting is risky. Depending on the area, you may also find it hard to let to suitable tenants.

In theory, what you want to do looks doable. But you may be in line for ERCs on the existing mortgage. Have you considered asking for Consent to Let on the existing mortgage? It may not be granted, but if it is, it'll save some fees and some admin.

ToriE

AMNblog - yes it was our intention to sell our current house port our current mortgage on to a new property. We dont really want to have a buy to let but we have to move, ( i start new job in 3 weeks, hubby in 5 and children start new school), plus we have had an offer accepted on a house and dont want to mess people around or to loose it really as it is ideal, so feel we are left with little alternative than look for a buy to let mortgage.

ToriE

I know and it does worry us Cornucopia ... but I can see few alternatives. our children have had so much upheaval and so many moves in their short lives with us both being in the militray that we are loathe to go into rented as it will be yet another move.

We are fortuntae that our current house is in an area that does have (potentially!) suitable tenants and there is a demand for family rentals - we are in Bath close to a Sunday Times Top 100 school.

I will ask re CTL but would that then prevent us getting another residential mortgage on the new house (which will be our primary residence)?

Cornucopia

I don't see how the timing can possibly work - I'm assuming the two houses have some distance between them? Is there no way of speaking with Tesco bank sooner?

Once CTL has been granted, it is effectively the same as having a BTL for the purposes of getting a new mortgage on another property. You can use all of your salary multiples on the new property, and the old one is deemed self-funding.

Also, whilst you broker may have ways around it, I have a feeling that some of BM's best rates are reserved for people who have experience of being landlords (I have such a product).

kingstreet

You can has as many residential mortgages as you can afford, however I presume your deposit is coming from the equity in your current home, so how could you purchase the new property without raising some money by remortgaging your current one?

The LTB is then your only option, as I don't see your current lender allowing you additional borrowing at the same time as granting CTL, although it's worth asking...

duchy

I suspect your husbands new job may put a spoke in the wheels.

Is your house actively been marketed? Any chance of an open day?

I think in your shoes I'd rent as the time scale is simply too short tbh

ToriE

You are right - there are 2 and a half hours between the new and the old so commuting is not an option although if time bought us more options I could live in single military accommodation in the short term and my husband and children could stary with family - but that is not really sustainable after the summer holidays, it just woudnt be fair on my parents (and not sure how long hubbie could put up with in-laws on his own!!!).

I begged Tesco for an earlier appointment yesterday - even did the woman on the brink of tears bit, they have put me on the cancellation list but they assured me that the earliest appt they had was 25 Jun which leaves us in limbo until then. I may call back and beg again .... but am not sure what use that will do, other than to potentially pi%% them off!

I have to keep reminding myself what we have and how fortunate we really are but it all seems to be falling down - the house went back on the market today so if we can buy time by staying with family/in the mess we may get lucky and get a quick sale but i dont know what the couple are thinking re the house we want to buy. They showed us round when we viewed and told teh EA one of teh reasons they agreed to sell to us was that they thought we were a nice family (the kids were on their best behaviour!!) so I was thinking of writing/ringing explaining our situation ...