Can I get a residential mortgage while my other property is on consent to let?

Danny1981

Need advice: Getting residential mortgage while keeping existing property on consent-to-let

Currently have a property with Halifax on consent-to-let (renews annually, no issues so far - expires April, will be 3rd renewal). Still mid 5-year fix.

Want to buy a new place to live in with a residential mortgage. Worried lenders will either:

• Force me into BTL on the new property (can't afford 25% deposit), or
• Make me convert existing property to BTL (would trigger massive ERCs)

Rental income covers existing mortgage + profit. Salary can cover new residential mortgage. Affordability isn't the problem.

Has anyone successfully done this? Any lenders or specialist brokers who handle this scenario?

Thanks

theartfullodger

Amazingly different lenders have different procedures and rules, and also amazingly each changes these from time to time. 

Mortgages when owning another property are not always significantly more expensive that plain vanilla "residential mortgage".  I've a number of times done so, usually getting another BTL. (ie keeps varying, offers etc etc)

In your shoes I'd speak to a small number of mortgage brokers and see what they come up with. Amazingly different brokers different answers. 

And they don't always get it right - applied for a mortgage through a broker, filled in his forms then rejected... For two reasons: 
- Reason 1.  Broker transposed my home post code onto I presume lender's system .. but got one character wrong.  Lender then got on his high horse accusing me of fraud as it appeared I didn't not live at the address lender had decided I lived at  (i.e. 63 AB1 2CD not 63 AB1 2FD).  Took I think 2 months to sort that out (I understood lender's caution).
-Reason 2.  Broker's form included which bank account I'd be paying from and what was my income (retired, 5 pensions including state etc etc).  I have a number of bank accounts, in particular one for "personal" and one for BtLs, the latter I pay landlord expenses from, but it (obviously) did not show most of my income.. Think that took a month to unravel, lender understandably think I was on the fiddle again).  Luckily I was in no hurry (already owned the place outright)

Appreciate rental income covers mortgage cost (which can go up...) - did you also factor in tax paid, expenses etc etc etc please?? 

user1977

Why the duplicate thread?

https://forums.moneysavingexpert.com/discussion/6638749/can-i-get-a-residential-mortgage-while-my-other-property-is-on-consent-to-let

_Penny_Dreadful

Danny1981 said:

Hi all, bit of a tricky situation and could do with some advice from anyone who's been through similar.

I've got a property that I moved out of a couple years back and my lender (Halifax) has been giving me consent to let for 12 months at a time. Been renewing it fine, currently good until April next year and they've been sound about extending it each time. (next April will be 3rd time). I have a 5 years fixed.

Now I want to buy another place to actually live in - found somewhere I really like and it's affordable. Problem is I need a residential mortgage on it (better rates, smaller deposit etc) but I'm worried lenders will see I've already got a property that's being let out and either:

1. Tell me I can't have a residential mortgage and force me into BTL on the new place (which I can't afford the deposit for)
2. Say my existing property needs converting to a proper BTL mortgage (which would cost me a fortune in early repayment charges as I'm mid fixed-term)

The rental income on my current place covers the mortgage easily with profit left over, and my salary can cover the new mortgage, so affordability shouldn't be an issue on paper.

Has anyone managed to do this? Get a residential mortgage on a new home while keeping their old place on consent to let?

Do I need a specialist broker or are there certain lenders who are cool with this setup? Really don't want to trigger any ERCs on my existing place or get stuck needing 25% deposit for BTL.

Any advice appreciated, cheers!

1. This won’t happen. If the intention is to live in the new property a BTL mortgage is not the right product. Most, if not all, BTL mortgages have a clause stating you’re not allowed to live in the property yourself. 

2. Highly unlikely. 

What the lender will want to know is if you can pass affordability to support both mortgages. 

Also keep in mind that you’ll need to pay the higher rate of LBTT/LTR/SDLT when purchasing your new home so hopefully you’ve budgeted for that.