Re Mortgage, with a view to letting the property out

quickoldfart

My Girlfriend is moving in with me, and we intend letting her flat.
She currently has a mortgage with Santander, but it sounds very complicated and disjointed, and appears to be paying well over the odds. so she is looking at changing her mortgage, regardless of letting it.
she only owes £55k on a flat worth £230K.


As it will end up being let, does she have to have a "Buy to Let" Mortgage or are there any better products out there that would be more suitable?


Many thanks in advance


Pete

dimbo61

If she wants to rent out the flat long term and become a Landlord then yes a BTL mortgage would be the way forward.
As she has a lot of equity in the property she could get a Larger Interest only BTL mortgage and use this money to buy another property.
This depends if the numbers stack up
125% rent compared to mortgage
For Example: Rent £500 and mortgage £400 a month
Does she earn over £25K a year
Really one for a Mortgage Broker

quickoldfart

Thanks for the reply
Yes she does earn over £25k and could probably think of a bigger portfolio, but for the moment just giving up her flat is a mega major decision, so small steps for now.

Thrugelmir

quickoldfart wrote: »

but for the moment just giving up her flat is a mega major decision, so small steps for now.

Perhaps consider requesting Consent to Let from her existing lender. Then she can retain the property for a period of time until she's certain of wishing to sell up.

Boogiecat

Thrugelmir wrote: »

Perhaps consider requesting Consent to Let from her existing lender. Then she can retain the property for a period of time until she's certain of wishing to sell up.

What Thrugelmir said! I did that when I rented mine out to go travelling. You have to renew it each year, and it's not free. Good luck moving in together, how exciting!

quickoldfart

Thrugelmir wrote: »

Perhaps consider requesting Consent to Let from her existing lender. Then she can retain the property for a period of time until she's certain of wishing to sell up.

The only down side to that is that her current mortgage is a mess, comprising of several different parts and is currently costing around double what a new standard residential mortgage would be. so it needs to change (or at least be sorted out)


One train of thought is to re mortgage now, then approach the new lender after a couple of months asking for permission to let it.
Any thoughts or comments on that would be very welcome, as would suggested lenders that are ok with giving permission to let, and ones to avoid that either want a kings ransom or simply say no.


Many thanks.

Typhoon2000

What interest rates are the loans on and what's the term? The reason the payments seem high maybe because it's over a shorter term.

Thrugelmir

quickoldfart wrote: »

The only down side to that is that her current mortgage is a mess, comprising of several different parts and is currently costing around double what a new standard residential mortgage would be. so it needs to change (or at least be sorted out)

Existing lender could consolidate the existing products into just one. Though you would have to be wary of ERC's.

Unsure what you mean by new standard residential mortgage. Lenders have cheap funds thanks to the funding for lending scheme. However the interest rates revert back to normal after the initial term has expired. Which are at far higher levels.

wotsthat

Thrugelmir wrote: »

Existing lender could consolidate the existing products into just one. Though you would have to be wary of ERC's.

I don't know about Santander but Nationwide at least are unable to do this. The only way I could consolidate my mortgages would be to find a new lender.

quickoldfart

Thrugelmir wrote: »

Existing lender could consolidate the existing products into just one. Though you would have to be wary of ERC's.

Unsure what you mean by new standard residential mortgage. Lenders have cheap funds thanks to the funding for lending scheme. However the interest rates revert back to normal after the initial term has expired. Which are at far higher levels.

ERC's ??? (I'm guessing the C is Charges)


By Standard residential mortgage = I meant just a normal mortgage that most people get, as opposed to a Buy to Let Mortgage


I need to get all her paperwork together, then have a word with her current lender I think.