Remortgaging a potential let to buy

clarabella23

Hi, I could do with a bit of advice about my current situation and thought here would be a good place. I will be seeking the advice of a mortgage/ financial advisor, but I wanted to have a bit of a clearer idea in the meantime.

I currently own a property, House 1, solely in my name. It is mortgaged to about 50-55% LTV. I have recently moved out of this and into rented property nearer to my daughters school, and I am letting it out, but I have not yet informed my mortgage provider (Natwest)- simply through forgetfulness, I am aware I need Consent to Let.

My partner also owns a house, House 2, currently renovating this to let out and buy a place together. He also has equity in his house. However, we have to wait until around March time next year before his credit is repaired enough for him to be able to apply for a mortgage- we have worked very hard on clearing debts down this year.

My fixed rate is up in November. We need to release equity from both of our houses to use for the deposit for a new house, House 3. The way I see it is I have a few options. Are any of these possible/ desirable?

1- Stay on the SVR, apply for consent to let for House 1, and wait until March, at which point we concurrently remortgage both House 1 & 2 on BTL and buy a new property together.

2- Apply for the consent to Let for House 1, fix a new BTL mortgage/ release equity in November, put this aside until March when it is needed for House 3. Can we release equity but not use it right away?

3- Move back into House 1, apply for a new residential mortgage/ release equity, but save that money until we are ready to buy House 3. Can we do this? I take it we would have to specify what the borrowing is for, but if I was to tell them it was the deposit for a BTL, would it be a problem when using it as a deposit for the next house? I appreciate thats a little sketchy, I'm just wondering if it will cause a problem later on. And would I have to wait 6 months before I can apply for the next mortgage?

The reason that option 3 is in the mix is due to the difference in borrowing amounts- as we live in the North East, these are relatively low value houses, so the difference in being able to borrow up to 75% equity BTL or ?90% residential will make quite a significant difference in deposit, but will still be easily covered by the rental income of House 1.

I appreciate this isn't a straight forward matter, and as I say, have every intention of visiting a financial advisor shortly, but I wanted to sound it out and ask for opinions. Any advice or other ideas is welcome!

clarabella23

Hi, just a quick bump on this in case anyone has any ideas for me

YHM

Definitely one for a broker.

Who has told you that you have to wait until March for his credit profile to be worthy of a mortgage?

MortgageAdviserTorquay

rather than let your mortgage go onto SVR, you could go onto a 2 year fixed product with no tie in period, Coventry have this facility. then when you are ready to purchase together you have release equity from both properties with no penalty.

clarabella23

Hi, sorry for the delay- I managed to miss the fact I had a reply.

A mortgage advisor we visited when his credit was really bad, had said that in his opinion we should pay off everything we could, wait 6 months and give his late/missed payments a chance to get farther down the line. We have, as of September, got everything barring one default paid off, no late payments or unknowns on his account and lots of lovely green ticks. The default will fall off in February, and is around £500 for bank charges that escalated, so we are loathe to pay it off- we would be trying to claim back for them if we didn't think it would start them chasing up again. There is still a default on his account, but this was paid off in full in March.

Do you think it won't make too much difference to who we can apply to/ any offers we might get by going now rather than waiting?

clarabella23

If I was to apply for a mortgage for my property with a new provider, even one with no exit fees, are there any limits on when I can apply for another mortgage? As that would be November, and we would hope to apply again together in March at latest.