Changing to Buy to Let Mortgage

Rachylou1981

Looking for some simple advice before we actually approach our mortgage company next year as feel a bit silly I don't understand the basics of this.

I have a house I rent out to a friend. I live with my partner elsewhere. I was only granted permission to rent for two years and once this is up then I must change the mortgage over to buy to let.

I have a few questions:

1. I am assuming this is a re-mortgage so will I need a deposit?
2. The house has equity so can this be used for deposit?
3. Will the new mortgage I get be based on mortgage left on the property or valuation now?

Thanks in advance. I have contacted a financial adviser I've worked with previously but it's been 5 weeks and no reply so posting here for help

amnblog

1. I am assuming this is a re-mortgage so will I need a deposit?

NOT IF THERE IS SUFFICENT EQUITY

2. The house has equity so can this be used for deposit?

YES IT CAN, IF SUFFICIENT (THINK 25% +)

3. Will the new mortgage I get be based on mortgage left on the property or valuation now?

VALUATION - THIS WILL DICTATE IF YOU HAVE OPTION TO RAISE ABOVE CURRENT LENDING

Thanks in advance. I have contacted a financial adviser I've worked with previously but it's been 5 weeks and no reply so posting here for help

PERHAPS ONE THAT PROVIDES A LEVEL OF SERVICE MAY BE MORE USEFUL

Rachylou1981

Thanks for your reply.


I think I will just make an appointment with mortgage provider to tell me straight.

amnblog

A meeting with a mortgage provider will get you only the view on that providers policy.

You need a mortgage broker.

Rachylou1981

I know this. Used a broker for my current home and we shopped around for best deal. I just meant to get the facts as I am not the best at understanding the basics. I am a year away from doing anything anyway.

dimbo61

You are changing the mortgage to a BTL mortgage.
You really should speak to a whole of market broker who deals in BTL mortgages and can search all of the market.
You may need a business plan to show how the figures stack up.
Rent, yield profit etc

Sarastro

In the first instance, speak to an independent mortgage broker. Then find yourself a decent IFA.

enthusiasticsaver

It will be a BTL remortgage so you will need a larger deposit than if you were remortgaging your own home. The equity between the amount needing to be borrowed (outstanding mortgage) and the current valuation at the time of the re mortgage can be used as the deposit providing it is 25% or more of the valuation (some providers will take 20% deposit on a BTL).

If you are not able to use your income if you are borrowing elsewhere for the house you live in then you will need to show proof of rental income (tax return?).