Complex mortgage?

millwalls

Hi,

My husband and I bought a house in 2015 on a Nationwide mortgage in Essex. In 2017, for various reasons (mainly a very long commute), we moved to a rented flat close to work in London and let the house out with a consent to let (+1% surcharge) with NW. The NW fix is ending in a few months and we don't intend to move back to Essex for a good few years at least. While on a CTL we can't do a product switch so have to remortgage to a BTL.

The outstanding mortgage is about 150k, less than 50% LTV and the rent is double the current monthly mortgage payment at 2.24%. I assumed remortgaging to a BTL would be no problemo. My husband earns 45k and I just started my own business a few months ago, no significant provable income to show yet, so any affordability will be based solely on the 45k income.

I contacted L&C who said that it's a complex case as we aren't owner occupiers and we don't own any other rentals and recommended that I contact a BTL specialist. The BTL specialist said it's a 'consumer BTL' which is FCA regulated so they don't have a license. I contacted a smaller independent broker who didn't seem interested, maybe because of the relatively small loan size (for London).

I was hoping the brokers on this board could give us an indication of whether this is indeed a lost cause or is it just a question of finding a good broker? If it's a no, we'll have no option but to move back as we wouldn't want to pay SVR+CTL (4.24%+1%) levels of interest. Are there any lenders that would lend in this scenario?

ACG

What you have been told is not incorrect as such, but it is hardly complex - certainly not for a broker who has been doing the job for more than 10 minutes.

Try a couple of other brokers, you will find someone to do it for you and at normal rates.

You may also want to consider the tax implications before going down the BTL route.

millwalls

Thanks ACG, that’s a relief to hear. We’ve already had to do a self assessment for 2017-18 and it was quite sobering to see how much goes in tax

But overall, it’s still manageable as net rental income after taxes and maintenance still covers the rent we pay, which is the limit we’ve set.

LRmortgage

As ACG says, as long as everything else stacks up, this really doesn’t sound like a problem case for a Broker who knows what they’re doing. Should be options at standard rates.

csgohan4

L and C are a free conveyor belt broker. They do volumes instead of quality. You get what you pay for generally. Any sign of ‘complexity’ Your in the back of the queue or given jargon it’s complicated

ACG

millwalls wrote: »

Thanks ACG, that’s a relief to hear. We’ve already had to do a self assessment for 2017-18 and it was quite sobering to see how much goes in tax

But overall, it’s still manageable as net rental income after taxes and maintenance still covers the rent we pay, which is the limit we’ve set.

Have you discussed how to make it more tax efficient?
I am not allowed to advise on tax, however it could be worth speaking to a tax advisor/accountant about potentially putting the property in 99% your name, 1% your husbands due to the tax banding you and your husband are on.

We (Mortgage brokers) are not just here to flog you mortgages and insurance. We are also here to try and save you money or point you in the right direction where we are not able to advise.

csgohan4

ACG wrote: »

Have you discussed how to make it more tax efficient?
I am not allowed to advise on tax, however it could be worth speaking to a tax advisor/accountant about potentially putting the property in 99% your name, 1% your husbands due to the tax banding you and your husband are on.

We (Mortgage brokers) are not just here to flog you mortgages and insurance. We are also here to try and save you money or point you in the right direction where we are not able to advise.

Not to mention the good brokers are not cheap as they have to have good insurance and compliance checks and systems in place to ensure they are doing the right thing for clients.

My own mortgage application was pulled for a compliance check to ensure I was given the correct advice.

millwalls

I’m now waiting for recommendations from 2 brokers who seemed confident! Thanks again for assuring me that it is indeed possible.

millwalls

It turned out to be as ACG suggested, I finally got 2 brokers to take my enquiry and both of them came back with the same recommendation of a product from The Mortgage Works. One broker charges 0.5% and the other is free so we're going with the latter.