can't get a mortgage... why?? best not to reveal buy to let?

fedupwiththiscountry

I've had a mortgage on my property for 5 years, the house is worth approx £130,000 and I owe £78,000. My credit score is 999 (excellent), however I've been turned down for two mortgages in the past two months.

I don't want to borrow anymore money, I just want to fix the lowest possible rate for the next five years. The company I went to for advice told me that I needed to have a buy to let mortgage, however I've been turned down so far for conflicting reasons:
Natwest declined because the property was already rented out (I don't understand that) and The Mortgage Works declined because it hasn't been let for more than 6 months (again I don't understand that).

My mortgage has been costing me approx £350pcm and I rent the house out for £650pcm so it's not exactly me trying to overstretch myself. Both declines from the mortgage companies have also stated a bad credit report, despite me having the highest possible score on Experian.

The only thing I can think of is that in order to get the property remortgaged I need to not tell the prospective new lender that I rent the property out? It seems as though the banking industry is overly suspicious about landlords - I can understand hesitation if someone only has a 10% deposit for a house they are planning to rent out as an investment, however I'm not in that position, I have a decent loan / value ratio and just want to get the best rate. Can anyone offer me any advice on how I can get my property remortgaged or how I can get around this problem?
I'm so frustrated with the computer says no mentality of the banks and getting turned down for reasons that don't make any sense. Please let me know if anyone's got any ideas

Foxy-Stoat_3

Not enough information but;

You have [STRIKE]paid[/STRIKE] wasted your money on obtaining a worthless credit score so this should be ignored.

Brokers are normally best to place BTL mortgages, have you been to a whole of market broker who deals with BTL mortgages.

Have you asked your current lender for their best fixed rate mortgage, assuming you have consent to let already? Your making £300 a month gross on your current arrangement which isn't bad, whats your rate at the moment?

Do you have another residential mortgage for your main home?

Dave_Ham

You need to get a broker on this, they are likely to suggest you get a copy of your Experian/Equifax reports.


I suggest the reasons you are being told are not the reasons for the fails..

Thrugelmir

fedupwiththiscountry wrote: »

The Mortgage Works declined because it hasn't been let for more than 6 months (again I don't understand that).

Lenders set their own policies on which they will lend.

Did you apply for a BTL mortgage with the Natwest?

fedupwiththiscountry

This has all been through a broker, they've come up with loads of excuses as to why I'm not appropriate but now they've had two last minute declines they have told me they dont want to apply for anymore because if natwest and TMW wont lend then in their opinion no one will.

The situation is that I've moved to London so I'm renting at the moment which I think causes a problem for lenders, they want the landlord to have a main property with another mortgage. I was planning to put a deposit down on a place in london as my main residence over the next six months but with this latest experience i get the impression that I might not get one (even with 50-100K deposit to put down)
I don't know what the potential ramifications would be if I didn't declare buy to let and instead got a residential mortgage on the property and rented it out anyway? There seems to be all this stigma attached to buy to let when in my opinion I bought the property 5 years ago to live in it, my situation changed so rather than sell the property when I don't need to I thought I would rent it out, what's wrong or risky about that?

Foxy-Stoat_3

Whats your current rate and have you got consent to let on the existing mortgage?

Dave_Ham

This does not sound like hard work.


Either there is something in your circumstances you are not sharing, or perhaps do not know or your broker is just inexperienced in this market.


As I said, does not sound like a particularly hard place.


Unlikely to get Natwest rates/terms mind you..

fedupwiththiscountry

my current rate is 3.99% and yes I've written to them to get consent (however I've just been on the phone to them and they told me they haven't received the letter so they are re-sending me one then the rate goes up after six months by 1.5%). I've basically got to a situation where the only option I can see is to reapply for the cheapest residential mortgage I can find. I still don't know how this would potentially affect me apart from for insurance purposes if at all?

Foxy-Stoat_3

Your only option at the moment is to get the consent to let with your current lender and buy somewhere in the next 6 months and then apply for a BTL mortgage with another lender shortly after that.

If you try and get a new residential mortgage now then you will have to lie and commit fraud in order to secure it, not really advisable.

Be careful if you commit mortgage fraud as this will stay with you for a long time if it goes wrong.

fedupwiththiscountry

Hi Dave Ham, the only thing I'm "not sharing" is that the company I used to work for couldn't pay me properly for around 18months so I had a couple of late (not missed) payments, when I say a couple I mean 2 and they were resolved within five days of being late. My credit score was "fair" last June and is now excellent - I paid off £5000 on my credit card in July clearing that balance and have paid around £20K into my account since June whilst withdrawing around £15K.
If this is going to have an effect then fair enough but I bet it wouldn't cause any problems if I went for a residential mortgage. Like I said, the TMW rejection was primarily based on the fact that I hadn't been letting the property for 6 months and the Natwest rejection was primarily because I was already letting the property.
If you think it might be my credit history (as opposed to score) then fair enough, I'll have to wait until I apply for another one.

I am still really keen to know hypothetically what the ramifications could be for someone who rents his property out but has a residential mortgage, any ideas out there?

fedupwiththiscountry

thanks Foxy Stoat, sounds like good advice!