Re-mortgage and an Existing Second Charge

DFW240980

I'm looking to re-mortgage my property away from NRAM in order to secure a better rate and I only have a consent to let until march next year and need to get it onto a BTL. The problem is I took out a secured loan on my property and my broker said I would need to take advice from the lender with the 2nd charge. I spoke to them today and they said the loan would need to be repaid in full before I re-mortgage. I have equity in my property but not enough to clear the loan. I'm not looking to re-mortgage and borrow additional money I simply want to switch provider and pay a lower rate of interest. I read somewhere that a Deed of Postponement can be used to to get around this issue.

I'd appreciate your thoughts and experiences on this matter.

Thanks in Advance

HappyMJ

You could....but you'll have more fees to pay and not all lenders would agree to it.

Could you get an unsecured personal loan to use to increase your equity in the property so you are eligible for a BTL mortgage product clearing both the mortgage and the secured loan?

DFW240980

I can't get an unsecured loan right now without paying a silly rate of interest, I've got some defaults on my credit file from 6 years ago which are due to drop over the course of next year which means I'm limited to what I can borrow and from whom. My second charge lender seems very dismissive and is insistent that the loan is repaid in advance of the re-mortgage they seem to think it messes up the affordability criteria, which doesn't make sense because I'm not borrowing extra, if anything it will improve my state of affairs by lowering my mortgage payments, it all seems a little unreasonable to me.

Thrugelmir

DFW240980 wrote: »

it all seems a little unreasonable to me.

You've borrowed money. The lender now wishes to be repaid. That's called business. Reasonableness does't come into the matter.

Goldiegirl

A deed of postponement can be used in this situation, but the second charge holder has to agree to it.

It sounds like they wouldn't be agreeable, so the deed of postponement is a non starter in this case.

DFW240980

A deed of postponement can be used in this situation, but the second charge holder has to agree to it.

It sounds like they wouldn't be agreeable, so the deed of postponement is a non starter in this case.

What are the reasons why they won't agree to it in a situation whereby affordability of the secured loan isn't in jeopardy? All I've got out of them so far is they would in affect become 1st Charge when NRAM are paid off and that's why I can't remortgage.

kingstreet

If the second charge lender won't agree to a deed of postponement, its second charge is promoted to a first charge when the mortgage (the current first charge) is repaid.

It can refuse to provide a deed of postponement for any reason. Wanting the money back would be the most likely one.

Thrugelmir

DFW240980 wrote: »

What are the reasons why they won't agree to it in a situation whereby affordability of the secured loan isn't in jeopardy? All I've got out of them so far is they would in affect become 1st Charge when NRAM are paid off and that's why I can't remortgage.

You are proposing to switch from Residential to BTL. This will influence the second charge lenders decision.

Switching to a BTL won't be easy either is the LTV on the property is too low. The ideal route is to settle the secured loan when you switch. Remortgage all the outstanding debt to a new single lender.

DFW240980

Thrugelmir wrote: »

You are proposing to switch from Residential to BTL. This will influence the second charge lenders decision.

Switching to a BTL won't be easy either is the LTV on the property is too low. The ideal route is to settle the secured loan when you switch. Remortgage all the outstanding debt to a new single lender.

Thanks for the response. The secured loan agreement with lender is a BTL agreement even though I only have consent to let and to be honest they haven't even enquired as to what my new mortgage might be. Having said that I have already come to the conclusion I will need to sit it out for awhile and re-finance my secured loan next year once things improve.

silvercar

Any reason why you cannot combine the NRAM mortgage with the secured loan into one single BTL mortgage?

TrickyDicky101

DFW240980 wrote: »

I'm looking to re-mortgage my property away from NRAM in order to secure a better rate and I only have a consent to let until march next year and need to get it onto a BTL. The problem is I took out a secured loan on my property and my broker said I would need to take advice from the lender with the 2nd charge. I spoke to them today and they said the loan would need to be repaid in full before I re-mortgage. I have equity in my property but not enough to clear the loan. I'm not looking to re-mortgage and borrow additional money I simply want to switch provider and pay a lower rate of interest. I read somewhere that a Deed of Postponement can be used to to get around this issue.

I'd appreciate your thoughts and experiences on this matter.

Thanks in Advance

Sounds to me like the property is in negative equity - hence the secured lender being intransigent and limiting OP's remortgage options