Liklihood of getting two mortgages at high LTVs?

mikki6416

Hello - A quick query, thanks in advance for any responses.

My husband and I are planning to move house later this year to get a place that's a bit bigger. We have lived in our current house for a while and it's occurred to us that we may be in a position to keep this house to rent out and buy another house to move into.

However, this is only possible by having a 75% loan to value Buy-To-Let mortgage on the current house (which seems about the maximum % you can borrow on a Buy To Let mortgage when I looked online) and taking out a 95% loan to value mortgage on the new house (which also seems to be the maximum % you can borrow for a mortgage when I looked online).

What I'd like to know is whether we're likely to be able to take out two mortgages at the maximum loan to values, or whether we're at risk of being declined a home-owner mortgage at 95% because we already have a Buy-To-Let mortgage?

The actual monthly payments on these mortgages could be covered easily so there isn't a problem with that part. We also have excellent credit scores.

Thrugelmir

mikki6416 wrote: »

The actual monthly payments on these mortgages could be covered easily so there isn't a problem with that part.

Lenders assess affordability at 7.5% interest rates. How would cope with interest rates at that level?

mikki6416

7.5%? I didn't know that.

I'll have to do some number crunching but I'm pretty sure that's also still affordable.
Our monthly income is very reasonable, the only reason for the high loan to values is to generate the lump sum needed to buy the second house (mainly towards paying for the stamp duty and the deposit) as a large amount of the equity we have in our current house will need to remain as the 25% deposit for the Buy-To-Let mortgage.

Richmc1983

Myself is going to see a mortgage advisor tomorrow to discuss the same thing, Change my current mortgage to buy-to-let and then buy another home for myself to live in.

mikki6416

Richmc1983 wrote: »

Myself is going to see a mortgage advisor tomorrow to discuss the same thing, Change my current mortgage to buy-to-let and then buy another home for myself to live in.

Ooh I'd be grateful if you could let me know what they say if possible.

Richmc1983

mikki6416 wrote: »

Ooh I'd be grateful if you could let me know what they say if possible.

No problem at all, I am only going for a chat to see where i stand.

samba

My wife and I considered doing this, and although we would not be stretching ourselves to anywhere near the same levels as you (approx 60% ltv on both), we were only considering it as a last resort if we couldn't sell our house.

Do you really want to be a landlord? What if you can't get a tenant? What if you get a nightmare tenant who trashes the house and stops paying their rent? Are you aware that it won't really be your house anymore (you won't be able to visit whenever you please) yet you will be responsible for all the repair and maintenance costs? What are you going to do when the boiler breaks?

Our vendors did a let-to-buy in order to facilitate their move, and after several months were unable to find tenants willing to pay the rent level they required to cover their mortgage costs, so in the end accepted our low offer.

nubbins

Sounds like you need to do some more saving before you go down this route. I have done this but on better LTV's than what you are suggesting and regardless of all the negatives it is worth doing as long as you have researched and really know what you are in for. I would definately not be getting a second property at 95%!

pwllbwdr

What would happen if the BTL mortgage valuation came back lower than you think it is worth. If you had to reduce the size of the BTL mortgage, you would be over 95% LTV on the residential one.

amnblog

This is one where there is likely to be a solution, but one that will involve some compromise (for example a little more deposit).

Richmc1983

UPDATE:

Just back from seeing a mortgage adviser and he thinks i will beable to get a 2nd mortgage without touching my 1st mortgage. He is going to do a search and see if its possible to obtain a 90% 2nd mortgage with my default on my record.

Rich