Can you combine 3 mortgages into one?

PJGILL

I have three properties that i rent out but none of the pay for themselves as i am on repayemnt mortgages on all of them. I wanted to know if someone knew of away of combining the date against all three thereby reducing arrangement fees when i re-mortgage?

Any help? Thanks

Martinslovechild

PJGILL wrote: »

None of the pay for themselves as i am on repayemnt mortgages on all of them.

I've got to admit that i'm totally confused here. Can you clarify what you mean by none of the pay for themselves?. Initially, I read this as meaning that all 3 mortgages are currently interest-only, but then you stated that all of the deals are repayment mortgages.

PJGILL wrote: »

I wanted to know if someone knew of away of combining the date against all three thereby reducing arrangement fees when i re-mortgage?

Combining what dates? The dates that you took the mortgages out? I don't think it's possible to combine multiple mortgages into one account, unless you owed sufficiently less on one or more properties that they could be repaid in full by extending one or more of the other mortgages, e.g. if you had repaid 50% of each of the properties, then you could in theory extend the amount of borrowing on 2 mortgages to 75% each to enable you to redeem the third mortgage (i.e. rather than 50% + 50% + 50%, you would end up with 75% + 75% + 0%).

PJGILL

Sorry for the confusion. When i said that they do pay for themselves i menat that the rent i get at the moment is less than the repayment mortgage payments.

The mortgages were all taken out at different times and have different lengths of times to completion and differing amounts owing on each of them.

I will soon be looking to remortgage all three at a similar time. What i would like to do is do them all as one rather than pay three arrangement fees. In essence looking for one morgage amount against the value of all three properties. This may not be possible at all as if i were to default on the payement they would have to sell all three to recover the debt. But thought i would ask anyway as i assume that there are people out there with more properties than i and have found ways of minimising the cost and i can not imagaine that people are running 25 different mortgagaes on 25 different properties. Or may be they are?

Hope that clarifies.

Thanks for help.

PJGILL

Al Mac, Thanks for the advice. There is not enough equity in any single one to pay off another. The amount i ahve to pay is not that much and well within my budget. If need be for a few months i could pay the mortgage on all three and have a contingency fund if this was to happen. I feel that the lonterm benefit will be that for the few hundred pounds a month i have to cover gives me a generous payout at the end of the period when all the mortgages are paid off and i have a helathy amount of capital.

Dithering_Dad

Standard Life have a BTL mortage package where you can have several properties with them, plus the advantage of offsetting and overpayments. An offset might be a good place for your contingency fund because as it offsets the mortgage it might help you get towards the point when the rent cover the mortages. I'm sure that SL are not the only lender who do allow you to build a portfolio in this way.

Also, have you thought of getting the properties on interest only mortgages so that at times when your properties are let and you have spare funds you can overpay and at times when they are empty you don't overpay, but enjoy the lower monthly rates?

PJGILL

I have thought about that but like the idea of clearing so of the capital debt aswell as the interest. I think in the lonterm like for like the repayment option is the cheaper but once all were combined would then find it slightly easier to see exactly how much extra i am paying each month. I am now looking at the over payments bit and would find this easier if i were paying off one mortgage rather than trying to decide which of the three i should make the payment to. One would have thought the one with the largest debt would be logical? I will look into the SL product and see if this fits as am particularly interested in the off set against my contingency fund.

Thanks

Dithering_Dad

I'd be the same if I went down the BTL route - I'd want to be a MFW with those as well. The trouble is that if you do pay them off you will be liable to income tax on the rent, whereas if all the rent is used to repay the interest, then you don't have to worry about tax.

MarkyMarkD

If you have BTL mortgages it is IMHO pointless being on repayment as the mortgage interest falls each month. As the mortgage interest is tax-offsettable you are increasing your taxable income each month.

Better to pay interest only on the BTL mortgages and use the difference between interest only and repayment to pay down your own mortgage, resulting in the same interest savings but no tax increase.

If you don't have your own mortgage, then feel free to ignore my comments!

I trust that you are reporting your taxable income on these BTL properties as you are quite probably making a taxable profit despite the properties not covering the full repayment cost of the mortgages?

PJGILL

I do declare the BTL mortgages on my tax return ans at the moment still do not make a profit. I do not have my own house as am renting through my work at a much reduced rate to the normal market rate.

MFW?