Is there an ERC for changing the names on the mortgage?

MortgageMamma

Hi Mandy

I have just phoned BM solutions about this one, and YOU CAN do a straightfoward transfer of equity on a BTL mortgage. I think whoever you spoke to on the phone has told you the wrong thing. If you want some more help with this let me know - Its not something I would get paid for by BM solutions but I'm happy to help you out anyway

silvercar

The other option, I suppose, is to rent the house out, and I could move into rental in something much smaller for the remainder of the discount period.

Don't think it is a BTL, OP was just looking at this as one option.

5 times your sole salary including a bonus sounds very high.

As far as stamp duty is concerned, you are transferring half the value (assuming a 50/50 split) so you would be assessed for stamp duty based on half the current value of the property. eg a property valued at 250k would mean transferring 125k which hits the stamp duty threshold at the 1% level, so the bill would be £1,250.

MandyMcG

Have spoken to my solr. As the property is owned as a joint tenancy, and I've paid almost all of the purchase and mortgage costs, there should be virtually nil stamp duty exposure.

As silvercar has surmised, BM have rejected the possibility that I could just move the existing home ownership mortgage to being a BTL product. I have been told by BM that this would immediately trigger the 5% redemption charge.

The earnings multiple issue still concerns me. On the form that BM have promised to send out (but have not done yet) should I say that I would plan to rent a room out in the property to help pay the mortgage? The truth is that I probably would, and this could take my earnings multiple down below 4.5 times. Would this be enough?

MortgageMamma

Telling lenders that you plan to rent out rooms, whilst perfectly legal and it is your right to do so, often puts them off in my opinion. Did the person on the phone not offer to do a full affordability calculations for you? BM solutions have affordability calculators on their website, but I think only for their mortgageplus product (which is part mortgage part loan) and BTL. They may well allow you to stretch to 5 x your income dependent on the level of your earnings. forgive me if this has already been stated in the thread, but what are your earnings and what is the amount of the mortgage u need to support by yourself?

MandyMcG

Thanks MM for your continued support and advice. My basic is £68.25k, plus travel allowance (paid as part of my monthly salary) of £6k. My bonus is paid annually in April. Last year the bonus was £15k, and it has not come in below £12k since I started getting bonuses 3 yrs ago. I expect it to come in at £15k again next April, but cannot swear to that, as it is not guaranteed. In addition to this, the company pays £5k to my pension fund.

I also work away from home a lot, and would estimate that I make £5k per year tax free, on expense and mileage allowances.

The total amount outstanding on the mortgage is £455k, but I have about £30k in savings that I can put towards it immediately, if needed.

I have another £20k in the form of an endowment due to mature in April of next year also, but probably can’t get at the cash before then.

luckyfool

Is this just for maintaining the current mortgage? Do you have to pay your ex partner anything to buy her out of the property?


Expenses and mileage allowances will not be included by lenders.

You should use the full bonus of £15,000 (BM Solutions only count 60% of this). I have seen them offer up to 5* a single salary for a single applicant with no dependents and a good credit score.

MandyMcG

Thanks Luckyfool

I have my salary review letters for last in my possession, so I'll attach that along with the 3 latest payslips that they have requested.

Fingers crossed !

MortgageMamma

hi Mandy sorry i didnt arrive back in time to help....I think you may be ok with this, like luckyfool says I too have seen them stretch for higher earners and you do have the 30k like you say. As long as you don't have any large debts (or lots of small ones) in the background you might just squeeze it through. I think from memory you said earlier in thread your partner does not want buying out is that right?