BTL mortgage possible?

seven-day-weekend

Hi there, we are a married couple in our mid-60s, income from Pensions of about £25k per year.

We have a mortgage-free bungalow that we live in, and a mortgage-free investment flat that we bought for £85k just after Christmas, bringing in an income of just over £500 pcm.

We have seen another flat in the same development, which if we were to offer on it, we would offer around £90k or a little more on £97950 asking price.(it is the same as our first one except it has a juliet balcony). It is around two years old on a new development.

Would it be possible in our circumstances and given our ages to re-mortgage the first flat on a BTL mortgage so that we can buy the second? Or indeed just raise a BTL mortgage on the second? We have a deposit if required of up to 50% LTV. We briefly had a BTL mortgage last year from Birmingham Midshires, but have now paid it off.

Any advice welcome, and I can give further information if required.

kingstreet

Can't see any problem with that.

Bravestar

Only problem I can foresee is with your age, as some (many?) mortgage lenders have an age by which the mortgage must be repaid, even for BTL properties.

70 years old seems about the maximum norm for many BTL mortgage providers, but a good mortgage adviser may know someone without any age limits.
The obvious issue they are concerned with is what happens when you die.

But with the returns you appear to be making, and you only needing £50k, perhaps you could pay that off in 5 years anyway.

seven-day-weekend

Bravestar wrote: »

Only problem I can foresee is with your age, as some (many?) mortgage lenders have an age by which the mortgage must be repaid, even for BTL properties.

70 years old seems about the maximum norm for many BTL mortgage providers, but a good mortgage adviser may know someone without any age limits.
The obvious issue they are concerned with is what happens when you die.

But with the returns you appear to be making, and you only needing £50k, perhaps you could pay that off in 5 years anyway.

Thank you for that. I understand our ages (67 and 66) may be a problem. However, we will have 50% equity in the property, even if we died the day after completion, so surely they could just sell it? It's not going to depreciate that much I wouldn't have thought. Or isn't that how they look at it?

lovinituk

Don't forget the additional 3% stamp duty in your calculations.

seven-day-weekend

lovinituk wrote: »

Don't forget the additional 3% stamp duty in your calculations.

I've remembered it, thanks:eek:

seven-day-weekend

Thanks for your comments. Having looked at the propery from the outside, it wasn't where I thought it was in the block, so I am not prepared to offer any more than £90k. I'll keep an eye on it and see if it's still for sale in a month's time. If it sells in the meantime, then sobeit

Bravestar

seven-day-weekend wrote: »

Thank you for that. I understand our ages (67 and 66) may be a problem. However, we will have 50% equity in the property, even if we died the day after completion, so surely they could just sell it? It's not going to depreciate that much I wouldn't have thought. Or isn't that how they look at it?

Not really. This isn't the US where (as I understand it) you can just hand your keys back to the lender when you no longer want, are are unable, to repay the loan.

Lenders here just want their money back by the end of the agreed term (on the terms agreed) - they don't want to buy houses, and then get lumbered with reselling them later.
Whilst they will ultimately repossess and re-sell if things do go bad once funds are advanced, they will not lend on that basis. It's even more complicated if repossession involves evicting a tenant.

MerrilyA

A great mortgage advisor should be able to help you out.

Have you thought about releasing equity from your other buy to let? (I think it's best to leave your personal home alone as you have the second property available). How about a lifetime mortgage? I believe these methods are favourable for older people. Speaking to a mortgage advisor or a couple of advisors might be good so you get to hear the options available to you.

Bravestar

seven-day-weekend wrote: »

Thanks for your comments. Having looked at the propery from the outside, it wasn't where I thought it was in the block, so I am not prepared to offer any more than £90k. I'll keep an eye on it and see if it's still for sale in a month's time. If it sells in the meantime, then sobeit

Worth taking the opporuntity in the meantimne to have a quick chat with a good mortgage broker (there are still many that won't charge for an initial consultation) to see if this is a suitable lender without age restrictions. At least then you'll know if it's even worth keeping an eye on the property, or even considering a different one.

I don't see any issues other than your ages, with getting a mortgage as proposed.