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Some mortgage advice please.

Last post Fri, Mar 16 2012, 9:41 AM by MOFFITT. 4 replies.
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  •  Fri, Mar 16 2012, 9:41 AM

    Re: Some mortgage advice please.

    Zeb

    Thank you for that advice. Much appreciated.

    • Post Points: 5
  •  Fri, Mar 16 2012, 8:32 AM

    Re: Some mortgage advice please.

    Simply taking a Buty to Let mortgage or selling the house will sort this problem. if you think there may be some delay in eitehr of these options then get in contact with your lender and let them know and request consent to lease until you can achieve either a sale or remortgage under buy to let.

    While I understaned that this may be accidental the lenders do take quite a harsh view on this nowadays as there is quite a difference between But to Let Rates and Residential Rates and significant difference between the fees involved. naturally this becomes attarctive to people to save money but the penalties can include Fraud Markers placed on your credit file which will massively hamper you gaining even simople things like car insurance or home and cibntents insurance. The lender can impose penalties (not applicable in your case) as this would be deemed a breach of the terms and conditions of the mortgage contract, they cqan ask for the loan to be redeemed immeditely and it may cause significant problems gaining credit in the future as your name will be luisted with all lenders for fraud.

    Best bet is to contact your lender and just ask for "Consent to Lease" on your property.....do not mention how long you have been renting the house for!!!...or go and see a mortage broker and organise a buy to let mortgage on your old house......or if you can, sell the place. Any of these options will sort the problem out

    • Post Points: 20
  •  Tue, Mar 13 2012, 11:46 AM

    Re: Some mortgage advice please.

    Hello Zeb

    Thank you.

    Your first point - EEEK! How do we rectify this? It has never occured to me what you say. Really silly. I want to get this sorted before I look at anything else. Gosh, what are the repercussions?

    Thank you.

    • Post Points: 20
  •  Tue, Mar 13 2012, 11:40 AM

    Re: Some mortgage advice please.

    First of all, although you may not have been aware of it it does sound like you have been commiting fraud for a little while. It is actually illegal to hold a house on a residential mortgage while you are renting the house out. Lenders will often give you specific permission to do this (on request only) in cases like your own where you have bought a second property but this permission will normally end when you hit the SVR forcing you to take on a Buy to Let mortgage.

    It is a Buy to Let (BTL) mortgage that you need to be looking at. The good news about this is that the calculation for affordability is not based on your earned income but is based on the assessed rental of your property. Saying that, you will need a minimum of £20k - £25k earned income between you to qualify for acceptance for a buy to let application.

    The way the affordability is calculated for buy to lets is that you will pick your product that you want (speak to a mortgage broker) and then this rate is calculated to give you a monthly cost. The rental you receive (or assessed to be able to receive) must then be 125% of the mortgage payment. So if your mortgage payment was £400 per month then the lender would want you to be assessed for £500 rental income per month. This calculation is based on the Interest Only price of the mortgage, not a repayment mortgage.

    Fees on BTL products are quite high at present but the rates are very keen and in a lot of cases (with low loan to value) just as competitive as residential mortgages

    Good Luck, hope this helps

    • Post Points: 20
  •  Tue, Mar 13 2012, 10:41 AM

    Some mortgage advice please.

    Hi Everyone

    May I please have some mortgage advice.

    My wife purchased a house a number of years ago. We put it on the market trying to sell while we looked for another place. The other place came along and we were in a lucky position to buy it, hoping that the 1st place would sell. Well, it didn’t. We went ahead with the purchase of our new home and we had very little choice but to rent out the first home. Problem is now, years have moved on, my wife is no longer working/unemployed in the current economic climate. The mortgage is on a banks SVR and ideally we would like to fix it now for the short/medium term.

    I don’t think it will be possible given my wife’s employment status. But I am hoping there must be something we could do. I am in employment, but the question of me taking on the mortgage given my income levels will not be the brightest solution.

    Any advice on this? Are we stuck on SVR until the missus eventually starts work again.

    Thank you everyone

    • Post Points: 20