Buy to Let my property refused by mortgage lender - so what is my next move????

danol21

Hi all,

i have been living with my girlfriend at her place for several months. I have kept my apartment and have had most of it done up (new kitchen, bathroom etc) in the hope of renting it out.

I spoke to Northern Rock who is my mortgage provider and explained the situation, they said i had to fill in a form which they look at then say if i can rent it out or not. (i do not intend to sell my property as it is in a prime location in cheshire)

Anyways, today i got the letter from them saying due to the high loan to value of my mortgage my request to let had been refused.

So what do i do now?

Can i changed my mortgage and go elsewhere?
I would incur charges for leaving early, are there any mortgage providers that would pay them for me if i moved to them?

or all in all am i going to have to stick it out for another 2 years till my discount period is up?

I honestly dont know what my next move in so any and all advice would be great.

Thanks

Dan

Debt_Free_Chick

danol21 wrote: »

Anyways, today i got the letter from them saying due to the high loan to value of my mortgage my request to let had been refused.

What is the LTV?

If you're not sure, tell us the value and the amount of your mortgage.

Jonbvn

To answer your question, you need to provide more information:

1. What is LTV%?
2. What is rental income?
3, What are the current mortgage payments?

PasturesNew

Yes, you need to give us the 3 bits of information jonbvn is requesting.

However, as an overview of the situation: if Northern Rock won't lend to you, it's going to be really difficult to find anybody who will.

Lending criteria have been tightened up a LOT since the other month.

There are already too many flats on the market with BTL mortgages where they are sitting empty and too many landlords with mortgages not being paid as their flats are empty.

It has gone from "easy money, sign here" to "you must be joking, you can't afford this" almost overnight.

danol21

My property is valued at approx 125k
My loan (mortgage) is 91k
My monthly mortgage payments are £569
I have been told from an estate agent i would get £550 a month rent

Hope this info helps

Dan

silvercar

Looks like the rent won't cover the mortgage paymetns, hence the lenders reluctance.

Some people would go ahead and rent it out anyway.:shhh:

herbiesjp

Not sure where where NR think that is a high LTV.

Anyway, plenty lenders will agree this on a BTL mortgage for you, some also including free legal fees and free valuation. This is based on the figures only.

As for whether it is right for you to do so, well that could only be found out after discussion and looking at the rest of your scenario

I would suggest having a word with a fee free whole of market adviser to see what they can suggest to you

danol21

Any recommendations of who to speak to?

MuDvAyNeX

Just a quick question you said your repments are £569, is that on an Interest Only or a Repayment ?

Only asking as some lenders will work on how much you would owe in Intrest and not include the Repayments in there calulations e.g Mortgage Express do it this way.

If your paying 500 per month but only 350 of that is the interest that is what there calcuations go on .

If you get what i mean...

UK007BullDog

Remember you are tied in. Make sure it is worth it to come out of the deal and to pay the penalty. Alternatively just rent it out and in 2 years time remortgage to a btl if you want to.

A_Nice_Englishman

UK007BullDog wrote: »

Remember you are tied in. Make sure it is worth it to come out of the deal and to pay the penalty. Alternatively just rent it out and in 2 years time remortgage to a btl if you want to.

But that's the problem. The OP has been denied permission to let.