Let to buy? Who do I speak to?

meemawuk

I recently got married and my wife and I would like to buy a family home in the coming year, whilst keeping the flat we currently live in to rent out.

I hold the mortgage alone at the moment for the flat.

I called my mortgage adviser to see what our options will be when renewal time comes round in order to plan for the future, and they refused to discuss it with me without permission from my current lender (?). I don't understand why this is the case As I was only looking for advice? I will try them again.

Anyway, I spoke to my lender and they told me that it was not possible to switch from a residential mortgage to BTL, but that it was likely that I would get consent to let. From looking at it online though, is is possible to make that change. Why would they say it wasn't? They advised me to complete an application online with my wife with all of our current expenses and debts on it (including the current mortgage) in order to work out what the maximum they would lend on a second property. Is this normal? I don't want to put myself in a situation with 2 residential properties and then be refused consent to let.

Also any clues on who I can speak to for impartial advice about my options would be appreciated.

kingstreet

Speak to an independent broker.

Consent to let could be useful if remaining with existing lender and not wanting to borrow more for the deposit for the residential. If you need to do that, a LTB remortgage would be best bet.

Broker will also find you best residential with a let property/mortgage in the background and satisfy the lender requirement for evidence of rental income.

PBA

Buy to let mortgages are not regulated by the FCA whereas residential mortgages are. So if you move from a residential to a BTL you are moving from a regulated to unregulated product. Under the current regulation banks are wary of letting customers do this, which is likely why your current lender will let you apply for consent to let but not move to a full BTL mortgage (both the lenders I have worked for have the same policy). Consent to let can be beneficial as you stay on a residential mortgage rate which is likely to be cheaper than BTL, but if you want to borrow extra or convert to interest only then a BTL mortgage will probably be the only way forward. In this case your only real option is to look to another lender. I have twice used London and Country for this and can't fault the service.

meemawuk

Thanks guys. No idea who I spoke to a L&C earlier in the week but I spoke to my usual guy today and am going to go through our options tomorrow. The likelihood is that we would need to release some cash but definitely need some advice on the issue.

I'm also struggling to balance the benefits of interest only vs repayment mortgages on the rental property. This is when it starts getting confusing for me because of tax implications. I assume interest only would be better because to offers an opportunity to build a cash buffer against interest rate increases and an opportunity to invest that cash elsewhere (ISA)

Is it feasible to do my own accounts oR do I need an accountant?

Also is there a fee to register as a landlord and where do I keep tenant deposits in order to comply with legislation?

Thrugelmir

meemawuk wrote: »

Is it feasible to do my own accounts oR do I need an accountant?

Easy enough to do ones own accounts. Though spending an hour with an accountant to understand the "rules" is a worthwhile investment. May also help you decide whether the venture is financially viable. As you'll be running a business managing tenants and a property. Not simply banking rent cheques.