I own a flat, I would like to rent it and buy a larger house to live in. How do I go about my mortgage?
Wednesday, April 15th, 2009 at
6:17 pm
I live in the UK and I own a one bed flat. I would like to buy a larger house to live in and rent my flat. Is there any way of avoiding a buy to let mortgage and get the usual mortgage to help me buy my house?
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Tagged with: Mortgage Help • Mortgage Uk • Rent House
Filed under: flat mortgage
Basically no in present financial climate.
Unless you are 110% certain you aren’t going to lose your job now is not a good time to buy a house (it will fall 15% more during 2009) and get yourself into bigger debt and negative equity!
What happens when your tenant moves out and you can’t cover the buy to let mortgage for a while?
Keep ourt of debt, save money and live within your means! 2009 is going to make 2008 look like a walk in the park!
Yes. What you are describing is a “let to buy” scenario, and is currently quite a common tactic for homeowners looking to move, though unable to sell their property.
Exactly how you go about this will depend on who you are with already, and who you apply to for the new mortgage. Very broadly speaking, if you are with one of the more reasonable high street lenders, it is possible to secure a “consent to let” from them first, basically letting them know you intend to let the property. More often than not, this consent is granted, though your existing lender will sometimes attach a price tag to this, usually in the form of an administration fee, or, occasionally, an increase in your interest rate.
Assuming you don’t wish to let your first lender know you are letting the property, you can still get a second mortgage, as when applying for it, the new lender does not always insist on seeing a consent to let. This will limit your choice of lenders, however, as most of them do.
In all cases, your second lender will require some reassurance you can afford both mortgages, and will want evidence of what rental value your 1 bedder can realistically achieve.
Unless you know what you are doing, it is best to speak to an independent advisor on this, as I know from experience this can be a lender criteria minefield.