Help!! Having a nightmare with Mortgage process

Roger316

Hi any advice out there would be really appreciated! I currently own a property (2up 2 down) and looking to buy a bigger home as we've got children growing up. 3 months ago I re-mortgaged my current property to pay for some debts we had, which now is clear. I however have enough money left to pay a 10% deposit on the new house we've seen. The seller has accepted our offer and we started the mortgage application through a broker. We also tried to beat he new SDLT deadline which comes into effect next week (1st April) by starting the legal proceedings with the solicitors. The whole experience to get the mortgage offer was a roller coaster and when it finally did it the offer had these special conditions imposed, stating we had to redeem our existing mortgage before they would lend? basically sell current property before we can borrow more! This was not a problem until yesterday when the buyer for my existing property pulled out! I fear due to this the vendors for the new property would put their house back on the market and I lose £££'s on legal and survey fees, I've since been advised by my broker that he would ask for the lender for a revised offer if I would rent my existing property, which would help with affordability ranges lenders look for. Can any subject matter experts out there advise me or share your experience with a similar situation.

Thanks
Roger

ACG

Some lenders will allow you to take out a new mortgage and ignore your current one if you are letting it out...It comes down to the lender, the underwriter and their criteria.

I would follow your brokers lead, they are trying to find ways to make the best of a not so great situation which is a good sign.

Roger316

Thank you, does that mean I start the whole mortgage application again or just declare a change in circumstances? Appreciate your response

AnotherJoe

Let's start at the beginning.
Were you planning to let out your existing house?
If so you'd need to convert your existing mortgage to. BTL and include that in the affordability calculations.

Or, if you weren't planning to let it out, why were you looking to keep it????

ACG

It should just be an alteration but it would not surprise me if some lenders required a new app.

AnotherJoe - the OP does not necessarily need to convert their mortgage to a BTL. They should request consent to let (CTL), but in terms of the new mortgage they may not even need confirmation of the CTL.

Roger316

hi there, the intention at 1st was to sell as we had a buyer through the EA in place, we declared during the mortgage application stage that it would sell within a month, however the buyer has just yesterday pulled out of the deal. We are now in the process of letting it as we fear losing out on the new property due to the time its taking + the vendors are restless

AnotherJoe

Fair enough about CTL but they'd still need to include that in their financial statements and from a POV of a lender I doubt it makes any difference.

However, from their wording it seems likely to me they weren't looking to do that and were expecting to buy the new house and pay two mortgages. Which would be an unusual thing to do.

ACG

If the lender accepts the property will be let then they may ignore their current mortgage payment.

Thrugelmir

How do the figures on letting your current house stack up?

How much equity did you release to clear your debts?

amnblog

Are you still trying to complete before Thursday to beat the SDLT deadline.

If so, you are heavily dependent on the lender you have the offer from being amenable to your keeping and letting the current property.

They may restrict you LTV on the purchase with a let property in the background even if the property covers itself on rent.

Roger316

Thrugelmir wrote: »

How do the figures on letting your current house stack up?

How much equity did you release to clear your debts?

80% LTV, rent payment well covers the mortgage repayment + additional few £'s