Need mortgage advice please-marriage breakdown!

lea

Hello

I am a bit clueless with mortgages and wondered if anyone could help.

Me and husband are joint owners of a 3 bed house that we bought in Jan 2006 for £182,500. We had a large deposit given to us by one of his family members, and our mortgage is through Skipton for £105,000 over 25 years, which was approx £590 p/month.

We accumulated large personal debt when husband was off work ill, and enquired with Skipton earlier this year to add our debt (£25,000) to our mortgage. We started the process but unfortuantely husband lost his job and it has to be put on hold.

In the meantime we unfortunately have split up and are now looking into the various options of what to do next. One option, which is our favourite, is to continue with the additional borrowing and then rent the house out. Skipton have given us a quote on their buy to let interest rate of £840 p/month over 30 years for mortgage of approx £127,000.

This seems a lot to me, as the rental value will probably only be about £750. Am I just being naive or are there better deals out there?

Sorry-don't know a lot about mortgages and its all so confusing!

Thanks for your help

Lea

Qual123

it wont work, no lender will lend when the rental income is less than the mortgage payment. There is another way! IM me and i will give you the details.

_Andy_

Sounds like they've quoted capital repayment. Would just be doable on interest only.

Gloster_Advise

Chelsea do no rental calculation on LTV's under 75%. so that property could have a rental income per month of £1 and they would still do it (theoretically speaking). Rate is not good though.

As andy has said they have quoted you repayment over 30 years. Interest only would be around £640pcm and would generally fit.

Regards
Si

lea

Thank you

So I may be able to get a cheaper deal on an interest only buy to let mortgage? We have had a rental valuation of £725-£750 p/month. So the cheaper the mortgage the better! And what are the implications of an interest only as opposed to a repayment mortgage?

Sorry-am new to all this,

Thanks
Lea

_Andy_

Interest only is 'cheaper' in that your mortgage payments will be less every month.
However, you wouldn't be paying back any of the capital (i.e. the debt itself, the amount you borrowed) each month so you'd get to the end of the term and have to pay the mortgage off, e.g. by selling the property.

lea

Thanks for your reply. I rang my mortgage provider and they have given me a quote of an interest only buy to let of £524 p/month. Would this be a good idea for the short term, perhaps a couple of years? I suppose it depends if house prices drop dramatically in the future?

Sorry-this is all so confusing!

Lea