Buy to Let question

dwill1503

Hi,
We currently own a house (valued at £180k) with a mortgage of £98k. The house is currently let to tenants (not on buy to let mortgage, Nationwide allowed us to rent it out for 4 years with consent). We have approx £15k debt which we really want to clear. We are thinking our options are:
1) sell house, clear debt, sit on deposit for 6 years while credit history repairs and then get new mortgage - has anyone done this? Does it seem sensible?
2)buy a new house in a different location but again to rent - e.g: valued at £87k with a rental of £600pm. Our current mortgage is £480pm with Nationwide but if we buy the £87k one we are unsure of what happens with regards to the LTV. Has anyone switched a residential mortgage to a buy to let? did they have to reapply?
Any there opinions welcome... TIA

amnblog

2) you have to re-apply
3) raise the extra 15,000 on the property with a new lender keeping the Nationwide mortgage as is.

Thrugelmir

Why would it take 6 years for your credit history to repair?

dwill1503

Because we have had some negative impact on our credit reports so would need to wait 6 years after paying off the £15k - at least that's what I understand...

Foxy-Stoat_3

If it is your intention to buy another property in 6 years time then the capital should really stay in property, not in a bank or ISA.

Is the £15,000 debt or unsatisfied defaults?

Also, please share the postcode where a £87,000 property can be let for £600 PCM.

dwill1503

Thank you Foxy-Stoat. the £15k is debt but we would really like it gone rather wait a few years when we would sell the house.

does anyone have any experience of changing mortgage and changing the lt.?

dwill1503

p.s there are surprisingly quite a few houses around that have a high rental but lower sale price. If you aren't fussy about where it would be.

Foxy-Stoat_3

dwill1503 wrote: »

Thank you Foxy-Stoat. the £15k is debt but we would really like it gone rather wait a few years when we would sell the house.

does anyone have any experience of changing mortgage and changing the lt.?

If the £15,000 is debt that your paying down then it won't adversely effect your credit rating, in fact it will help you. You won't need to wait for 6 years after you have cleared it to get a mortgage, it would be better not to wait for your repayment history to disappear before you apply for a mortgage.

I have experience in trying to pull equity out of my house to use to clearing debt, switching to a fixed rate and getting consent to let at the same time. The lender wasn't happy to release the funds I requested even though I had more than enough equity to still leave me with a 70% LTV mortgage but everything else went fine.