Let to Buy and some mortgage questions/advice

londongirl

Hi all,

I'm going to try and keep this brief! Could do with some advice help - just at the beginning stages of discussing buying somewhere with my bf. I'd like soon as poss but he has barely any money saved at all at the moment so it will likely be many months down the line. I'm starting to think everything through in detail though so some thoughts/advice would be appreciated.

Am thinking of Let to Buy - i own a studio flat. I have a mortgage on it for about 35% of the value so have a reasonable deposit. We cannot afford to move to anything bigger in the area (edge of NW london) but as an investment and because of the hassle/length of time to sell a studio flat, i am thinking of let to buy (not buy to let!).

Questions are:
1) Is a let to buy mortgage all one product - ie it has to be with the same mortgage provider - both the let to buy mortgage on my studio flat which will then release some of the deposit needed for our residential mortgage on new place. Or could i get a mortgage with two different providers?

2) Porting mortgages - i'd like to ideally port my coop mortgage rate to new residential property, they will port it - but the rest of the mortgage needed (porting it will only be about 25% of the new mortgage needed) does that have to also be with the coop or could i get another providor to give the rest of the mortgage?

3) I probably need to speak to a mortgage broker really as i think it may not be too straightforward but we aren't really at that stage yet, just want to think things through ourselves first without having to pay for mortgage advice before we are ready. I did'nt have a choice with mortgage advice before as it was shared equity and i had to have coop mortgage so have not had experience of a mortgage broker - what is best way to find one and how much are their fees normally if they don't get fees from commission?

4)I'm going to be a reluctant landlord if i do it this way, but neither of us are big earners, and the difference the rest of the deposit will make on what kind of house we can get elsewhere doesn't actually make the biggest difference ever - i.e we still wouldn't be able to live where we actually want to! I've been reading about landlord responsibilities etc and also about profit/tax and capital gains tax etc. Going into it wiht my eyes wide open but would still like more info. Can anyone recommend a really clear website that details things for a first time landlord? Or a book even?


If anyone has had experience or recommendations of doing let to buy that would be appreciate to hear your tips/stories.

Finally, I am assuming that if i were to get a new residential mortgage on a new property that i would not be able to just get consent to let on my old flat? rather than needing a new letting mortgage?

Thanks
Londongirl

jennifernil

How about remortgaging the studio on a BTL for as much as you can (bearing in mind the rent you will receive), then use the cash released as a bigger deposit on your next property.

Possibly see if you can port your existing residential mortgage.

londongirl

Hi Jennifer,
Thanks for your reply. That's exactly what i am planning on doing - sorry if i didn't make it clear. It's called Let to buy rather than buy to let! As i'm not buying a property to let, rather letting my current property to release equity to buy a new one to live in.

That's what my questions were based on. Hope someone else might have some advice/ experience with this?

TIA

kingstreet

LTB/BTL are pretty much interchangeable.

You don't use the same lender for that as you use for the mortgage on the purchase.

You need to ask Co-op if it will allow a port from a remortgage. Most don't, it's port from a sale only.

If you can port, you do the whole new mortgage with Co-op and the increased borrowing is offered on one of the lender's new products. Will co-op accept the let property/mortgage in the background and exclude it from affordability if it's self-financing?

Broker fees and costs vary. No way to generalise. Ask friends and relatives for a recommendation. Failing that try https://www.unbiased.co.uk switching off the "sponsored ads only" option so you get a full lost for your area.

You could get CTL on your current property/mortgage but then where would the deposit for the purchase come from?

londongirl

That's very helpful thank you!