Re-Mortgage ?

theshed

Hi
Long story short, eldest daughter was buying a property then moved away, daughter two moved in with partner, then split and she is now back home. Son, one of, moved in temporarily before Uni'. Now house is empty.
Eldest now wants shut of house, with house prices falling we considered buying it with a buy to let mortgage but provider wants us to put in £30,000. We had saved £20k
Second option. Remortgage our own home, value approx £190,000, £25,000 remaining, and pay off daughters mortgage to use as buy to let.
Daughters house valued at £155,000 with £120,000 owing.
In my world, advantages to this are less legal/survey fees on both properties and only one mortgage with interest rates slightly lower on B2Let.
Wife and I both in late fifties earn approx £36,000 each, both expect to work for another 15 years.
Is this feasible and would lender allow it ?
Thanks

kingstreet

Don't appear to be any issues with that.

penners324

Your mortgage company will likely take issue with it

kingstreet

penners324 said:

Your mortgage company will likely take issue with it

What can you see that I can't?

theshed

kingstreet said:

penners324 said:

Your mortgage company will likely take issue with it

What can you see that I can't?

Mortgage application in place. Only issue is 'lending into retirement'.
Not a deal breaker at present, so we still hopeful.
Frustrating in that if it was a straight buy to let they not interested in retirement age as they take the property as 'repayment vehicle'.

ACG

Your taking on your daughters £120k debt... If anything happens to you, your daughter has in essence inherited £120k and your other kids £0. Not an issue if you are ok with it. 

You can get up to 80% LTV on some BTLs. Have you spoken to a broker? 

theshed

ACG said:

Your taking on your daughters £120k debt... If anything happens to you, your daughter has in essence inherited £120k and your other kids £0. Not an issue if you are ok with it. 

You can get up to 80% LTV on some BTLs. Have you spoken to a broker? 

No the house will be bought in the names of my Wife and I.
We spoke to broker at L&C, all was going well with buy to let, then for reasons not explained they asked for £30,000 deposit.
As that was unachievable they suggested trying our current lender as we had 'history'.
And that is where we up to. 

noitsnotme

Are you prepared for what being a landlord entails?  All the rules, regulations, expenses, annual tax returns for you both, etc?  Can you afford to pay the mortgage if you have periods of no tenants or tenants stop paying rent while you try to get them out?

I’ve been a landlord for 20 years and have been extremely lucky with tenants but I wouldn’t want to take on any more properties now with the way things are gradually moving against landlords.

theshed

Agreed it is wrought with pitfalls, but as an investment we would be silly to throw it away.

housebuyer143

theshed said:

ACG said:

Your taking on your daughters £120k debt... If anything happens to you, your daughter has in essence inherited £120k and your other kids £0. Not an issue if you are ok with it. 

You can get up to 80% LTV on some BTLs. Have you spoken to a broker? 

No the house will be bought in the names of my Wife and I.
We spoke to broker at L&C, all was going well with buy to let, then for reasons not explained they asked for £30,000 deposit.
As that was unachievable they suggested trying our current lender as we had 'history'.
And that is where we up to. 

Most places for BTL require a minimum of 80% ltv, that's where the £30k is coming from I imagine.

The lender is going to see if you can afford your residential mortgage on the new rates on a 15 yr term and honestly, the payments are going to be very very high, like over £1000 a month, can you actually afford this? 
You would be better if remortgaging and taking only £10k out your residential property and then topping up the BTL deposit, assuming you can get enough loan from the lender based on the rent for the BTL 
It's important to know why L&C needed a bigger deposit before you can establish what to do. Did you need more LTV or did the rental calculations fail and so you need more money in it?
Don't forget the additional stamp duty which will take a chunk from that deposit you have. 

theshed

Property value is below threshold so we should be ok with stamp duty ?