Buy to let mortgage rates
Discussion
Hello everyone, I'm new to the buy to let game as I have recently had to relocate for work purposes and the in-laws have offered to rent my house but my mortgage company says that I will have to change it to a buy to let. I have about 22 to 24% equity and not sure where the best rates are and the legal ins and outs of a possible arrangement. The property is in Scotland if it makes any legal difference. Any advice from the knowledgable collective is greatly appreciated.
But to let is not your only option. I have a number of properties and some have a residential mortgage on them the way this has come about is that I bought the house then lived in it but then bought the next a few years later etc. Anyway you need to call up your bank and ask for "permission to let" this is a little known option but miles cheaper in fact the fee is £195 admin fee and your existing deal continues. The last place I bought like this was June 2009 the rate I pay is 2.5% OR at the time a buy to let was best part of 5% with near on 2.5% booking fee plus the tie in.
Not all offer it but well worth looking into it. Note no IFA will advise this or broker as there is nothing in it for them.
Note I have four properties on this set up the rest are buy to let.
Some idiots let without permission don't do that do it the way I have shown above you have an official letter and it's for the term 25yrs
this is nothing new either as my old man did this back from mid 1960.
Good luck pity I cannot take a fee for saving you thousands oh well enjoy
Not all offer it but well worth looking into it. Note no IFA will advise this or broker as there is nothing in it for them.
Note I have four properties on this set up the rest are buy to let.
Some idiots let without permission don't do that do it the way I have shown above you have an official letter and it's for the term 25yrs
this is nothing new either as my old man did this back from mid 1960.
Good luck pity I cannot take a fee for saving you thousands oh well enjoy
Welshbeef said:
£195 admin fee
Wrong, the fees vary from lender to lender, not all lenders will do it, and some have stringent criteria for giving permission. Equally as it stands you cannot remortgage these properties to a fresh resi deal, unless you have sufficient income to cover both it and the mortgage on a house you live in. Thats all fine whilst SVR's stand where they do, but your options are limited whne rates start to rise.Welshbeef said:
Note no IFA will advise this or broker as there is nothing in it for them.
That is utter s
te. I have several clients with LTB's on ex residential properties. I've also done their new residential mortgage, so there is quite often "something in it" for an IFA. Don't tar us all with the same brush, thanks.If you read the OP rather than jumping in about your own genius you'll see that the poster has said he has already checked with his mortgage company, who have told him he can't have permission to let.
Welshbeef said:
Some idiots let without permission don't do that do it the way
I agree with you, alot of people however don't.Welshbeef said:
an official letter and it's for the term 25yrs {/quote]
Not always it isnt, a number of lenders will only give permissionto let for the duration of an incentive, or for a given time period, at the end of which the mortgagor has to either reapply for permission or remortgage the property. The permission can also be withdrawn at the lenders discretion.
Not always it isnt, a number of lenders will only give permissionto let for the duration of an incentive, or for a given time period, at the end of which the mortgagor has to either reapply for permission or remortgage the property. The permission can also be withdrawn at the lenders discretion.
Welshbeef said:
Good luck pity I cannot take a fee for saving you thousands oh well enjoy
You haven't saved him thousands, you've advised him to do something he's already been told he cant do..... nice one. statts1976uk said:
Hello everyone, I'm new to the buy to let game as I have recently had to relocate for work purposes and the in-laws have offered to rent my house but my mortgage company says that I will have to change it to a buy to let. I have about 22 to 24% equity and not sure where the best rates are and the legal ins and outs of a possible arrangement. The property is in Scotland if it makes any legal difference. Any advice from the knowledgable collective is greatly appreciated.
Depends who your current lender is, are they refusing permission becuase they never give it, or are they refusing permission because of the LTV or becuase of the likely rental income from the property?Are they refusing permission becuase you are planning to let to family members?
1. At the mom the Btl is capped at 75%, so you're going have problems with LTV.
2. Fees on BTl are horrendous.
3. Rates aren't great.
4. Most BTL lenders will not lie it if you let to family. So you are goin gto have to pick your lender really carefully.
scotal said:
Welshbeef said:
£195 admin fee
Wrong, the fees vary from lender to lender, not all lenders will do it, and some have stringent criteria for giving permission. Equally as it stands you cannot remortgage these properties to a fresh resi deal, unless you have sufficient income to cover both it and the mortgage on a house you live in. Thats all fine whilst SVR's stand where they do, but your options are limited whne rates start to rise.Welshbeef said:
Note no IFA will advise this or broker as there is nothing in it for them.
That is utter ste. I have several clients with LTB's on ex residential properties. I've also done their new residential mortgage, so there is quite often "something in it" for an IFA. Don't tar us all with the same brush, thanks.If you read the OP rather than jumping in about your own genius you'll see that the poster has said he has already checked with his mortgage company, who have told him he can't have permission to let.
Welshbeef said:
Some idiots let without permission don't do that do it the way
I agree with you, alot of people however don't.Welshbeef said:
an official letter and it's for the term 25yrs {/quote]
Not always it isnt, a number of lenders will only give permissionto let for the duration of an incentive, or for a given time period, at the end of which the mortgagor has to either reapply for permission or remortgage the property. The permission can also be withdrawn at the lenders discretion.
Sport onNot always it isnt, a number of lenders will only give permissionto let for the duration of an incentive, or for a given time period, at the end of which the mortgagor has to either reapply for permission or remortgage the property. The permission can also be withdrawn at the lenders discretion.
Welshbeef said:
Good luck pity I cannot take a fee for saving you thousands oh well enjoy
You haven't saved him thousands, you've advised him to do something he's already been told he cant do..... nice one. Scotal he states that they have told him he has to get a buy to let that's exactly what abbey my last one told me however I then went down the route of permission to let and as it turned out no issue.
My point to the IFA's on permission to let take my £195 fee for example frankly there is little meat on the bone for an ifa to be wasting their time on that when there are more profitable customers out there - I may be cynical but I cannot see an ifa justifying a business model where they would take a cut of circa£195 especilly in lower volume sales times.
For sure commission based ifa's would avoid permission to let.
Can the op reply stating if he has asked for permission to let fro
their resi mortgage supplier.
My point to the IFA's on permission to let take my £195 fee for example frankly there is little meat on the bone for an ifa to be wasting their time on that when there are more profitable customers out there - I may be cynical but I cannot see an ifa justifying a business model where they would take a cut of circa£195 especilly in lower volume sales times.
For sure commission based ifa's would avoid permission to let.
Can the op reply stating if he has asked for permission to let fro
their resi mortgage supplier.
Welshbeef said:
For sure commission based ifa's would avoid permission to let.
I am a commission based IFA, and you are talking rubbish.Maybe you have simply dealt with the wrong people, but you are talking absolute rubbish.
The fee levied for PTL has nothing to do with an IFA, they will receive nothing from it, however the good ones will look at the long term picture, and know that a client looking to PTlk will possibly at some point want a BTL and/ or a new resi mortgage.
Many lenders will not even talk to an IFA regarding PTL, they will only deal with the customer direct.
Given the LTV the OP has mentioned he is going to struggle to get a BTL mortgage in the current climate......
Welshbeef said:
Some idiots let without permission don't do that do it the way
I am currently in this position. I have a freehold house, which I have converted into 2 flats, I live on the g/f and rent the 1st floor.As my current mortgage is such a good deal, and I cant really re-mortgage as buy-to-lets as there are bugger all deals about without at least 25-30% deposits.
I know what I am doing is wrong, but what can I do ? I guess at the worst if my mortgage company find out, they will demand their money back/ me to re-mortgage.
I do at least have comprehensive landlords insurance for the converted building.]
I'm also thinking about moving. Any IFA's have any solutions / advice on financing my next property ?
Mark.
Worst case is they demand the money back straight away and if you cannot do that in their timescale they will auction the property due to you breaching the t&cs.
Chances of getting caught ?? Who knows firstly make sure no payments are missed that will avoid any unneccessary ilooking into you. Secondly don't post online about such things or tell anyone as anyone could shop you in.
Electoral role is one way your likely of getting caught and the other is different address. Also you have to inform the inland revenue when you rent and they may well inform the banks.
Credit searches as address changes could be another possibility.
Apart from those obvious ones I'm not sure what else but sure there are other ways.
Chances of getting caught ?? Who knows firstly make sure no payments are missed that will avoid any unneccessary ilooking into you. Secondly don't post online about such things or tell anyone as anyone could shop you in.
Electoral role is one way your likely of getting caught and the other is different address. Also you have to inform the inland revenue when you rent and they may well inform the banks.
Credit searches as address changes could be another possibility.
Apart from those obvious ones I'm not sure what else but sure there are other ways.
IMO
Money is still to expensive and deposit to large to make this worthwhile.
Lenders have big deposits because in my eyes they feel there could be another shakeout and the deposit will hopefully safe guard there balls from being burnt again.
I too would love to buy again but until the most important thing works out "the numbers" i wont be diving in anytime soon.
Money is still to expensive and deposit to large to make this worthwhile.
Lenders have big deposits because in my eyes they feel there could be another shakeout and the deposit will hopefully safe guard there balls from being burnt again.
I too would love to buy again but until the most important thing works out "the numbers" i wont be diving in anytime soon.
auditt said:
IMO
Money is still to expensive and deposit to large to make this worthwhile.
Lenders have big deposits because in my eyes they feel there could be another shakeout and the deposit will hopefully safe guard there balls from being burnt again.
I too would love to buy again but until the most important thing works out "the numbers" i wont be diving in anytime soon.
Agree, I am consolidating what I have already got, ensuring I get good long term rent paying tenants, and carrying out both remedial repairs and upgrades to properties. Going to be lots of people unable to get mortgages over the next 5 years, so the renting market for me is looking towards a bright financial future.Money is still to expensive and deposit to large to make this worthwhile.
Lenders have big deposits because in my eyes they feel there could be another shakeout and the deposit will hopefully safe guard there balls from being burnt again.
I too would love to buy again but until the most important thing works out "the numbers" i wont be diving in anytime soon.
unclemark123 said:
I am currently in this position. I have a freehold house, which I have converted into 2 flats, I live on the g/f and rent the 1st floor.
Your mortgage co will have a blue fit if they find out you've done that. unclemark123 said:
As my current mortgage is such a good deal, and I cant really re-mortgage as buy-to-lets as there are bugger all deals about without at least 25-30% deposits.
Equally I bet the flats are not on seperate leases? So you are going to struglle anyway.Equally I assume your "house" now has 2 kitchens? That's anothert thing they will hate.
unclemark123 said:
I'm also thinking about moving. Any IFA's have any solutions / advice on financing my next property ?
Mark.
You will shortly have mail.Mark.
scotal said:
unclemark123 said:
I am currently in this position. I have a freehold house, which I have converted into 2 flats, I live on the g/f and rent the 1st floor.
Your mortgage co will have a blue fit if they find out you've done that. unclemark123 said:
As my current mortgage is such a good deal, and I cant really re-mortgage as buy-to-lets as there are bugger all deals about without at least 25-30% deposits.
Equally I bet the flats are not on seperate leases? So you are going to struglle anyway.Equally I assume your "house" now has 2 kitchens? That's anothert thing they will hate.
unclemark123 said:
I'm also thinking about moving. Any IFA's have any solutions / advice on financing my next property ?
Mark.
Depending on when you bought the house and converted it.Mark.
Firstly did you get planning permission? If not ok
we all pull a few strings every now and again.If the split was after four years, you should apply for a lawful use certificate from your council.
Speak to your solicitor about drawing up 2 leases,
subject to hwen you bought the property, could 1 flat carry the whoel mortgage i.e. re-mortgage a flat and have your flat mortgage free, so worst case is that if you didnt keep up with repayments of your flat you would still have your flat to live under
You will shortly have mail.
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