Re-mortgage to buy to let survey

murphster

Hi, I am wondering if somebody might be able to help me / give some advise.

I currently live in a fairly new (1996) two bed end of terrace house which cost me 77,500 in Dec 2006 and which I have completely redecorated including new kitchen and bathroom and added double glazing. The house is in Middlesbrough (the North East). I have been wanting to move for a while and finally bit the bullet and put my house up for sale in mid august.

I wasn't sure how much it was worth, but in today's market would have been happy to get back what I paid for a quick sale, my current mortgage is 46,000. I had it valued by express estate agency (cowboys in my opinion but that's another story), they suggested an asking price of 80,000 and I put it up for sale.

After a couple of weeks with no interest they suggested I reduce the price to a guide of 75,000 They gave a story about how reducing the price would encourage a price war and another client actually got a higher price than the original asking price by doing this - haha (I've since looked into this and it seems a bit of a ploy of theirs). Anyway I reduced the price.

I quickly became uncomfortable with this and a friend suggested that I might be able to rent it out instead. I spoke to a mortgage broker, he did the figures and it seemed this would be possible and actually a better option. Based on a value of 80,000 I have 34,000 equity, 20,000 could be put towards a buy to let mortgage with 75% LTV and 14,000 for a deposit towards a new home. This sounded good the house I wanted was 140,000. I decided to go ahead, got an agreement in principal and an offer accepted on the house I liked, even found a tenant for mine.

Everything is proceeding well, solicitors have been instructed etc the next stage is surveys. This is were I'm getting worried. Will the reduction of the guide price by express reduce the surveyor's value, will the building society only want to be sure they will get their 60,000 in case of repossession. There's a two bed across the road up for offers over 77,000, next door sold in May 2009 for 77,500. The last house to sell in the estate was a three bed and sold in Aug 2014 for 89,000 however, the one before that was a two bed sold in July 2014 (this sold for 67,000 but it looks like and older persons house that needs work even had a disabled shower and I'm wondering if it was sold after a death or before going into a nursing hoe) Zoopla estimates mine at 79,000 . I am really stressed have I overestimated the value of my house, does it really matter as it's my 20,000 that would be at risk, if the house doesn't value everything will fall apart.

Does anybody know how these things work, the building society is Natwest, if it was a case of having to get a higher interest rate with a higher LTV I wouldn't have a problem (I can well afford the mortgage) but because it is a buy to let they won't go over 75%. The survey is on Monday but I can't sleep with worry.

Thanks in advance.

brit1234

Before you rent out your property are you aware of the big tax changes coming in in 2007 and are you aware of the responsibilities of a landlord?

murphster

Hi, I wasn't aware of the tax changes, O don't give me any more worries. I have had a good look at all the landlord responsibilities and a good chat with a letting agent, thanks.