Mortgage broker - ask me anything

silvercar

talkiewalkie said:

A family member has a BTL property in a Limited Company, with a BTL mortgage. Their circumstances have changed following divorce and they would like to revert to living in the BTL property and transfer to a residential mortgage. 

If the property wasn't owned by the Limited Company I think it would be straightforward to convert the BLT mortgage to a residential mortgage (with the usual affordability checks of course) but how would this work when the property is owned by the limited company (which is of course, their company), as presumably, you couldn't swap to a Residential mortgage while the property is owned by the Company, rather than an individual?

Can any mortgage broker offer any suggestions of how this would work? Thanks for reading - I'd be grateful for any pointers I can pass on as my family member is really struggling.

(Goes without saying that putting the property in a LC was a huge mistake in retrospect!)

Really best to see an accountant.

Basically 2 options:

1. Move into the property and retain it ownership by the company. There may be a BIK tax liability, for the company providing living accommodation. There may be a way to structure director’s loans to rent it from the company, notionally at least or it may be possible for the company to keep it and the director live in it rent free, though that may also incur a tax liability.

2. The company sells it to the director. You would need a professional RICS valuation for tax purposes. There may be a way to structure the purchase via directors loans. If the company sells it, the director would have to pay SDLT, depending on the price and the mortgage by the company would need redeeming and a new mortgage taken out in the directors name. The company may have. CGT liability.

The lender may be unhappy. Tax law means a company and a director aren’t the same person, so the lender can’t really object unless there is a specific term and condition to the mortgage preventing renting to directors. Any condition preventing renting to family members wouldn’t apply as companies aren’t living people and don’t have siblings or parents. (For the pedants, companies can have parent companies, but not in the biological sense). 

DE_612183

Hi, this has probably been asked before - but my Mortgage deal ( 2 year fixed Clydesdale ) is coming to an end in April.

I'm also hoping to move house - but will be downsizing so not sure how portable my mortgage will be as I'm actually planning on reducing it from about 230k to under 100k - which I assume may be taken as incurring a penalty.

If I move to a tracker product and then port / or clear and take out a new mortgage - is this a better way of avoiding fees and a couple of months on the SVR?

thriftypatos

Hi

Does anyone have access to broker rates for Natwest? We are up for renewal in June and want to get ahead of the game by seeing what's available to brokers vs retail online.

We have 3 sub-accounts with NW, total mortgage £1.1m, therefore tired to this lender. This sub-account is £435k or thereabouts. 68% LTV currently. 

Thank you!

kingstreet

thriftypatos said:

Hi

Does anyone have access to broker rates for Natwest? We are up for renewal in June and want to get ahead of the game by seeing what's available to brokers vs retail online.

We have 3 sub-accounts with NW, total mortgage £1.1m, therefore tired to this lender. This sub-account is £435k or thereabouts. 68% LTV currently. 

Thank you!

Unfortunately, these are no longer generally available. NatWest has followed Halifax in no longer publishing its customer retention products, nor making them available on broker sourcing systems. The customer retention options are now only available by signing into the borrower's mortgage record within the allowed timescale, starting from 1 March for a 30 June expiry.

homeless9

If I go through a broker for my mortgage renewal, once we have a first mortgage deal in place - will the broker be proactively looking for cheaper deals day after day after day for the whole ~4 month renewal period?

I am not sure how often rates are changing these days, but someone told me they can change weekly.

If I don't go through a broker I will be daily checking the rate to see if it has dropped to bag a better deal. Although I am still not clear on this - as far as I understand you can change deal as many times as you like during the renewal period. ie. if the rate drops week after week after week, you can change your deal to that better rate over and over again until 14 days before the new deal takes effect after the previous term expires.

K_S

homeless9 said:

If I go through a broker for my mortgage renewal, once we have a first mortgage deal in place - will the broker be proactively looking for cheaper deals day after day after day for the whole ~4 month renewal period?

I am not sure how often rates are changing these days, but someone told me they can change weekly.

If I don't go through a broker I will be daily checking the rate to see if it has dropped to bag a better deal. Although I am still not clear on this - as far as I understand you can change deal as many times as you like during the renewal period. ie. if the rate drops week after week after week, you can change your deal to that better rate over and over again until 14 days before the new deal takes effect after the previous term expires.

@homeless9 Based on what you've said, probably best to do it yourself, so you can check as often as you want and change without depending on anyone. Based on recent NatWest history, you'll probably get the same rate or a teeny weeny bit better/worse.

How often rates may change, in the recent past - had a quick look at my inbox and NatWest has sent out product guide change notification emails to brokers once in Jan, twice in Dec and twice in Nov. That doesn't mean that every rate will change every time, or that everything will go up/down together, just that some will have changed.

homeless9

K_S said:

homeless9 said:

If I go through a broker for my mortgage renewal, once we have a first mortgage deal in place - will the broker be proactively looking for cheaper deals day after day after day for the whole ~4 month renewal period?

I am not sure how often rates are changing these days, but someone told me they can change weekly.

If I don't go through a broker I will be daily checking the rate to see if it has dropped to bag a better deal. Although I am still not clear on this - as far as I understand you can change deal as many times as you like during the renewal period. ie. if the rate drops week after week after week, you can change your deal to that better rate over and over again until 14 days before the new deal takes effect after the previous term expires.

@homeless9 Based on what you've said, probably best to do it yourself, so you can check as often as you want and change without depending on anyone. Based on recent NatWest history, you'll probably get the same rate or a teeny weeny bit better/worse.

How often rates may change, in the recent past - had a quick look at my inbox and NatWest has sent out product guide change notification emails to brokers once in Jan, twice in Dec and twice in Nov. That doesn't mean that every rate will change every time, or that everything will go up/down together, just that some will have changed.

Thanks for this. I was 95% heading towards renewing my mortgage by myself, but now I am 99% likely to do it myself.

It would be nice if borrowers could just pick a deal early on in the 4 month renewal window and then if the rate gets cheaper - the lender automatically gives you the lowest rate they offered within that period.

So, I want a 5 year fixed with no fee, 60% LTV.... I don't know why the lender can't just allow me to have whatever their lowest rate was during the 4 month period for that specific arrangement. It would be an easier and fair way of doing things.

snowqueen555

Hi, I'm wondering if this is yet another problem in my home hunting. I've had an offer accepted on a flat but it is a cross cross/Tyneside lease.

I thought great, no service charges or ground rent, I'd be responsible for repairs either split half, or we are responsible for half of the building. But it seems some lenders will not lend on these leases, and they are fiddly when it comes to the conveyancing side of things.

I've done a heavy Google search that includes this forum, and there is very little content but mainly with issues related to buildings insurance, so that is yet another issue as it seems some companies don't insure these either.

The EA during the visit has said that this was on previously and that the sale fell through because the lender wanted a deed of variation or something along those lines for whatever problem they may have spotted.

I am in the South West so I do see these on Right I've from time to time, but they are pretty rare. I've had no luck with finding out if a solicitor has experience in these, they all say yes and you only ever get to speak to the admin staff anyway.

Thanks

K_S

@snowqueen555

Generally speaking - Tyneside flats aren't unmortgageable, there are mainstream/mainstream-ish/specialist lenders that will consider. 

Specific to this property - will depend on what's in the lease, lender, etc. and how cooperative (or not) the other freeholder/leaseholder is. Each lender may have slightly differing requirements, for example needing to take out a charge on the freehold as well which may or may not be okay.

snowqueen555 said:

Hi, I'm wondering if this is yet another problem in my home hunting. I've had an offer accepted on a flat but it is a cross cross/Tyneside lease.

I thought great, no service charges or ground rent, I'd be responsible for repairs either split half, or we are responsible for half of the building. But it seems some lenders will not lend on these leases, and they are fiddly when it comes to the conveyancing side of things.

I've done a heavy Google search that includes this forum, and there is very little content but mainly with issues related to buildings insurance, so that is yet another issue as it seems some companies don't insure these either.

The EA during the visit has said that this was on previously and that the sale fell through because the lender wanted a deed of variation or something along those lines for whatever problem they may have spotted.

I am in the South West so I do see these on Right I've from time to time, but they are pretty rare. I've had no luck with finding out if a solicitor has experience in these, they all say yes and you only ever get to speak to the admin staff anyway.

Thanks

snowqueen555

K_S said:

@snowqueen555

Generally speaking - Tyneside flats aren't unmortgageable, there are mainstream/mainstream-ish/specialist lenders that will consider. 

Specific to this property - will depend on what's in the lease, lender, etc. and how cooperative (or not) the other freeholder/leaseholder is. Each lender may have slightly differing requirements, for example needing to take out a charge on the freehold as well which may or may not be okay.

snowqueen555 said:

Hi, I'm wondering if this is yet another problem in my home hunting. I've had an offer accepted on a flat but it is a cross cross/Tyneside lease.

I thought great, no service charges or ground rent, I'd be responsible for repairs either split half, or we are responsible for half of the building. But it seems some lenders will not lend on these leases, and they are fiddly when it comes to the conveyancing side of things.

I've done a heavy Google search that includes this forum, and there is very little content but mainly with issues related to buildings insurance, so that is yet another issue as it seems some companies don't insure these either.

The EA during the visit has said that this was on previously and that the sale fell through because the lender wanted a deed of variation or something along those lines for whatever problem they may have spotted.

I am in the South West so I do see these on Right I've from time to time, but they are pretty rare. I've had no luck with finding out if a solicitor has experience in these, they all say yes and you only ever get to speak to the admin staff anyway.

Thanks

Hi, thank you for the reply

1. How common are they and what sort of charge does it entail?

2. I'm guessing if I come to sell then it will be harder for people to get a mortgage on it? Is this something to worry about?

3. I'm wondering among a panel if banks how many do not lend on them?

Thanks