How to work out finances for buy to let mortgage

badgerbread

I am in a very difficult position and trying to figure my way out of it. I am very naive about all of this so please be gentle with me. I have a property that is currently worth £260000 I owe £189000 on it we are having issues with selling it we have had several buyers but none seem to be able to get the mortgage because of their personal financial issues. I am desperate to move because my son has had a lot of problems in school and we need to get him out Asap. We have found a new place for £280000. My husband earns good wages but is reluctant to go on a buy to let as this would take him up to the higher tax bracket so it would be in my name and I only earn £13000 per year is it possible to get a buy to let mortgage or is there another way we could work this out? Please help I am really desperate to move now I can't bear to see my child so upset every morning and evening about going to school. The school are useless at dealing with the issues as I have been up there countless times.

amnblog

Yes, there should be options for you in your name only.


It may or may not be the best idea to have the property in single rather than joint names however.


A good mortgage broker will assist you.

In_For_A_Penny_2

If you husband is below the higher rate income tax it doesn't sound like you have a huge joint income to be contemplating an additional large mortgage - affordability might be an issue but I am by no means an expert.

How long has your house been on the market?

ExpertAdvice

What exactly are you planning to do?

It seems that you are looking to buy a new property for £280K on BTL basis and reside in it? Is this correct?

Or are you looking to convert the current property to BTL?

You will not be able to get a new property for £280K or anything in that price range on BTL basis on single name. BTL lending has become very tight in the last few months. Although there are a couple of lenders that don't require a minimum income for BTL, they have started to assess the affordability. Therefore, on a salary of £13k its going to be most likely a no.

How much deposit do you have available for a BTL? You need a minimum of 25% to get any decent deal.

Moreover, if you are looking to get a new property on BTL basis which is my understanding, you are not allowed to live in it.

Why not get a 'consent to let' on your current property from the existing lender or convert it to Let to buy and then buy a new property on a residential basis provided you fit the affordability.

However, the issue of higher tax bracket still stands but I don't think you have many options.

Thrugelmir

What's not clear from your post is if what you propose is even viable in financial terms.

To sell the property quickly reduce the price. It's a sure way of finding a buyer.

lonestarfan

amnblog wrote: »

Yes, there should be options for you in your name only.


It may or may not be the best idea to have the property in single rather than joint names however.


A good mortgage broker will assist you.

AMN can you explain a bit more for the benefit of others. What kind of options could there be. The op doesn't say she has any funds for a deposit, they could remortgage the existing property to BTL but that would hardly release much as a deposit on another property, you can't reside in a Btl.
She could, get consent to let and then buy a new property but on a salary of £13k then I can't see on her wages so it'd have to be on both. The op says her husband gets good wages but I'm I'm not sure what that means as no figures given.
I see a lot of merit in thrugelmirs suggestion as to drop the price substantially and achieving a sale could be less of a problem and less hassle than trying to raise funds.
OP - is your husband on board with your plans anyway? What's he doing to try to sort this out with you? Is there another school in the area or is it that you have to be in catchment as its over subscribed?

badgerbread

Sorry didn't make myself clear we want to change one we are in now to buy to let and rent it out and keep it in my name. Buy new property in joint names to live in. My husband is totally with me on this he earns £49700 so financially we are sound. We don't have any extra savings as such at the moment because we have been paying off our mortgage.

badgerbread

Thrugelmir wrote: »

What's not clear from your post is if what you propose is even viable in financial terms.

To sell the property quickly reduce the price. It's a sure way of finding a buyer.

We have reduced the price and have no problems finding buyers in fact we have had 4 surveys done but it all falls down at the last hurdle when it comes to them getting a mortgage offer. We were worried that the survey was letting it down but we have been assured by the estate agents that the survey is fine it's just people's finances that don't add up for one reason or another.

saverbuyer

badgerbread wrote: »

Sorry didn't make myself clear we want to change one we are in now to buy to let and rent it out and keep it in my name. Buy new property in joint names to live in. My husband is totally with me on this he earns £49700 so financially we are sound. We don't have any extra savings as such at the moment because we have been paying off our mortgage.

He's already in the higher tax bracket.

badgerbread

lonestarfan wrote: »

AMN can you explain a bit more for the benefit of others. What kind of options could there be. The op doesn't say she has any funds for a deposit, they could remortgage the existing property to BTL but that would hardly release much as a deposit on another property, you can't reside in a Btl.
She could, get consent to let and then buy a new property but on a salary of £13k then I can't see on her wages so it'd have to be on both. The op says her husband gets good wages but I'm I'm not sure what that means as no figures given.
I see a lot of merit in thrugelmirs suggestion as to drop the price substantially and achieving a sale could be less of a problem and less hassle than trying to raise funds.
OP - is your husband on board with your plans anyway? What's he doing to try to sort this out with you? Is there another school in the area or is it that you have to be in catchment as its over subscribed?

Hubby is totally with me on it and is helping look into what we can do. There are no decent schools in our area we can get him into. All the good schools are oversubscribed and we have been on waiting lists for over a year with no sign of him getting moved. We honestly feel we have no option left but to move. We was planning to move after he finished school anyway it's just happened earlier than planned.

badgerbread

saverbuyer wrote: »

He's already in the higher tax bracket.

Sorry my mistake he says that any rental money we would get back would be 40 percent tax and it would not be worth our while doing. I did warn you I am not very knowledgeable lol