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Buy to let mortgage - or not?
Magda_Darcy
Posts: 17 Forumite
Hello
I am in a bit of a quandary. We moved for work a few years ago and have been privately letting our house after it failed to sell. We rent the house we live in, and because our rental income is low, don't actually make a profit from it, but it does cover the mortgage. We have been declaring this for tax purposes, though it's below the relevant threshold. I have been in twice to the bank to ask about switching to a buy to let mortgage and was advised both times not to bother because they couldn't offer us as good a rate. I am uneasy about this - I don't like not doing things properly. Now however we want to put the house on the market (in about 6 months or so), am in the process of trying to reclaim PPI and I am anxious about being caught out and hit with a sudden bill - should I switch?
Magda
I am in a bit of a quandary. We moved for work a few years ago and have been privately letting our house after it failed to sell. We rent the house we live in, and because our rental income is low, don't actually make a profit from it, but it does cover the mortgage. We have been declaring this for tax purposes, though it's below the relevant threshold. I have been in twice to the bank to ask about switching to a buy to let mortgage and was advised both times not to bother because they couldn't offer us as good a rate. I am uneasy about this - I don't like not doing things properly. Now however we want to put the house on the market (in about 6 months or so), am in the process of trying to reclaim PPI and I am anxious about being caught out and hit with a sudden bill - should I switch?
Magda
0
Comments
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Hi Magda,
Have you got consent to let for the house though? We have had consent to let for the last 2 years, which we have another year left on. This rate is currently 3.5% (Went down from 4) which is excellent. We know when this ends we won't get such a good deal.
If you don't have this... you have let them know that you are not living there though?:rotfl:0 -
Do you have 25% equity in the property?
Is the monthly rent at least 125% of the monthly mortgage interest at a rate of perhaps 6% per annum?
If the answer to either of these is no, you are very unlikely to be able to get a BTL remortgage.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Kingstreet yes we tick both of those.
Ellesbelles We have notified them of a change of address. We did a 1 year permission to let arrangement a few years ago, but they had a maximum term of 2 years. Originally with this period we envisaged a long-term let, hence my enquiry to the bank and alarm when they told me twice not to bother...
Having difficulty finding the permission to let form online, but that would seem to be the sensible option given our plans, if it's available.
Thanks both0 -
Ok. So you could remortgage, but if you intend to sell the property, there is no point paying fees for a long-term plan when you are looking only for a short-term solution.
Continued consent to let from your current lender is what you require.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0
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