Mortgage

cpnick

Hi, nearly four years ago my son bought a second floor flat above some commercial offices on the ground floor; there are several flats on the upper floors and Santander approved this mortgage. Now, my son wants to turn this mortgage into a Buy-to-Let and rent out his flat, taking some of the equity out as a deposit on a house. Santander have again approved a mortgage on his new buy house. The Buy-to-Let mortgage was to have been with Barclays (lowest interest rate), but they have turned it down due to fact that the flat is above commercial premises; otherwise I assume mortgage was available.
Could anyone suggest why Santander approved a mortgage on the flat four years ago, whilst Barclays won't now? Also, can anyone suggest a lender that would give a Buy-to-Let mortgage on a flat above commercial premises?
thanks,
Nick.

davidmcn

cpnick wrote: »

Could anyone suggest why Santander approved a mortgage on the flat four years ago, whilst Barclays won't now?

Because:

• Santander and Barclays will have different lending criteria
• Lending criteria can differ among different mortgage products with the same bank
• Criteria may have changed over the last four years

Also, can anyone suggest a lender that would give a Buy-to-Let mortgage on a flat above commercial premises?

No, but I suggest he goes to a broker now that he's found out there's more to it than picking the lowest interest rate.

Thrugelmir

cpnick wrote: »

taking some of the equity out as a deposit on a house.

That may influence the underwriters decision depending on the lenders own internal criteria.

dimbo61

Has your son done his research ?
Does he know about the tax changes which might mean he makes a loss from renting.
He will have to pay an extra 3 percent stamp duty.
Local rental market for flats in the area.
Landlord responsibilities ?
Fees for getting a BTL mortgage can be expensive.

cpnick

Hi, many thanks for these replies.
Yes, my son has had a broker to arrange these mortgages. This broker has been successful with a mortgage of the new buy house, but we heard on Friday about Barclays turning him down with the Buy-to-Let.
Also, my son knows about the Governments hike of the extra 3% on Buy-to-Lets. He has done his maths and feels it will be worth it in the long run.
I'm am just hoping my son's broker can find a more compliant lender. Money is all ok as far as I know! Seems daft to me.
Thanks again for your replies.
Nick.

kingstreet

Success or failure on a flat above commercial will be down to the surveyor's comments at the time of the inspection. This is how Barclays decides to lend, or not.

Other lenders may take the same view, particularly if the same surveyor is contracted.

The broker should take this into consideration when researching other lender options.