Obtaining a mortgage while at no fixed abode

paddysreturn

Hi,
I would like to rent out my flat and move to another place in a different area of the country. The plan would be to leverage the equity in my current flat to get a btl mortgage, clear my outstanding non-secured debts and have enough left over as a deposit for a second property. 

I believe the first part shouldn’t be a problem - I easily obtained an AIP for the amount needed from a major bank. However, im concerned about the second step. If it takes say 2 months to clean my credit file (it’s not in a disasterous state), I will have left my current home and be either staying with friends and family or in an airbnb. I won’t have proof of address or have changed the details on my accounts.

Is this likely to be a big issue? Financially, I should comfortably comply with the criteria as I’m only looking for something around 3x salary and I’ve been with my employer for a long time. 

Any insight would be welcome. I do need to apply for the BTL first though as without it I won’t have the deposit. 

K_S

@paddysreturn Your scenario isn't uncommon at all. Is there any reason you wouldn't just do a let-2-buy? Find a place to buy and once you have an offer accepted do the two mortgages (capital raise BTL remo and using that deposit for onward purchase) together, simultaenous completion. Your choice of lenders will be much better.

As a first time landlord, the scenario you've outlined (moving on to stay in temp accomodation) will put off a lot of lenders at underwriting.

paddysreturn

Thank you for your prompt response KS. 

I would have considered that the fact that my credit file needs some touching up and that the deposit for the second house was coming from the BTL mortgage would’ve precluded me from doing them both simultaneously 

K_S

@paddysreturn I don't know about your credit issues, but one of the main reasons why most of my clients do let2buys is to use their equity in the old property as a deposit for an onward purchase and to be able to move home seamlessly. 
 https://www.which.co.uk/money/mortgages-and-property/home-movers/let-to-buy-explained-axb2g3h8hhx3

MWT

paddysreturn said:

... If it takes say 2 months to clean my credit file (it’s not in a disasterous state)...

I'd suggest you reach out to a broker and talk to them about your credit file concerns as if, from your perspective, they can be fixed in a couple of months with some of the proceeds of the BTL mortgage it is at least possible that they can be stipulated as being repaid on closing in the new residential mortgage application and you could proceed as K_S suggests...

Worth a try at least otherwise you may face credibility concerns with your BTL mortgage if you are in effect making yourself homeless in the process.

paddysreturn

Yes, I agree that seems like the best way forward. Thank you both for taking the time to reply this morning

lonibra

OP, which major bank did you get an AIP from?

paddysreturn

Hi, I had from both NatWest and Barclays - though only through soft searches.