Remortgage to Buy to let and get a self-build mortgage, any thoughts?

JBReluctantLandlord

In 2008 my partner and i got a Birmingham Midshires self cert mortgage. We were both self employed we borrowed £63000 on a joint income of £20,000, to buy a a 3 bed terrace house in need of repair for £88000.

We stood out as owner occupiers in a largely rented street in an interesting poverty stricken area. After an elderly couple opposite was hounded out of their home it was our turn next. After more than a year of abuse, car tires slashed and wing mirrors smashed, as soon as the renovations were done we ran for the hills.

BM granted us temporary consent to lease, on a rolling 12mnth basis. We rent the house out at £495mnth the agent takes 10% (now tenant is entitled to ~£550mnth LHA we could put the rent up to £550)

We now live in a rented property £600mnth. I now have 3day a week job at just short of £13000 take home pay on a contract for another 3years. Variable self employed income of from £7500/year down to £1000/yr before last and ~£5500 last year, and my partner has an income around£3500-£5000/year.

BM will only grant temporary consent to lease for a maximum of 3years this comes to an end in September this year and will not convert a self cert-to buy-to-let so we must remortgage. We value the house at around £90000 and the cost to close the BM mortgage is £53000.

We have a very modest income and an unbelievably frugal lifestyle, good credit rating, history of repayment & £22000 savings.

Questions I have for anyone who thinks they may be able to help:
1) Will we be able to remortgage this property on a buy-to-let mortgage? How to go about that?
2) Are we in a position to get another residential mortgage on another property and max would a lender be willing to lend?
3) Would we be able to get a self-build mortgage?

With rose tinted glasses on we would get an affordable Buy-to-let with max LTV, boosting a deposit for a residential/self build mortgage for second renovation/build project that will become a place we can finally call our own home.

Where best to get advice?

Any help appreciated..

JB Reluctant Landlord

laurasavon

For a Buy To Let most lenders will want you to have a residential property that you own and a minimum income of £15-20k. The lending is based on rental income vs interest on the monthly payment (often 125%+).

I'm sure a broker would be able to find something for your circumstances but it may be at a premium. What about asking BM to convert your mortgage to a BTL? Or sometimes lenders add a % to the interest rate you have.

The residential or self build would be dependent on your personal circumstances, you don't say how many years you have left to retirement and that would be a big factor on the affordability. You would certainly need a good size deposit (which it sounds like you have) and the money is often released in stages for self build mortgages as the build progresses.

If your a reluctant landlord would you not consider selling the house to fund the new purchase?

JBReluctantLandlord

Re: selling the house. Apart from the speed of a sale, in an ideal world it would become our pension, as we have both worked mostly self-employed so far. We are both 36 and still a long way off retirement.

When BM granted our third year of consent to lease they informed us that they would not convert a self cert to BTL, we have not pursued this with them further.

Guess I need to talk this through with a broker.

laurasavon

I would speak to BM again and tell them you don't want to pay to move when you are happy with them and ask what your options are, for example if you were unable to get a BTL mortgage elsewhere would they enforce a sale (I doubt it!)

I'd say a broker would be a good option as I'm sure they deal with these things all the time