Mortgage Redeemed – should I port deal to another property?

by Readers Question

11:49 AM, 14th October 2014
About 4 years ago

Mortgage Redeemed – should I port deal to another property?

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Mortgage Redeemed – should I port deal to another property?

I recently sold a BTL which whilst it generated good net profit when occupied (mainly due to low tracker rate mortgage), was always a problem property. Tenants not paying, wrecking the property, I suppose we all have them. So I decided to let go.

The property had an 85% mortgage on it with BMS and I ended up receiving a small amount extra in equity back. I’m not sure I want to invest in anymore BTLs as I have other business interests now, but I am wondering whether I should try to transfer the mortgage to another property.

I understand it can be transferred up to 6 months from the redemption date. Whilst most of my other properties are also on low rate trackers. I have 2 on SVR at rates 1.55% and 2.5% above the rate of the recently redeemed mortgage, plus one with West Brom at their ‘tracker/variable move the goal posts rate’. The only problem is both of the SVR properties have larger mortgages than the one redeemed and one is definitely in negative equity whilst the other probably has little or no equity.

Without putting in a substantial sum I think it unlikely I can transfer the redeemed mortgage over to either of these properties, unless anyone has any other thoughts. The West Brom property has plenty of equity but the rate saving would only be .75% and I’m very hopeful we win the forthcoming case and I get my original terms on that mortgage reinstated.

Finally would it really be worth purchasing another BTL just to make use of the low rate tracker (2.45%), although I’m assuming that in this case any lending would be restricted to the BMS current criteria and in addition I still have 3 other BTL mortgages with Lloyds Banking Group subsidiaries, so I’m not sure they will allow a 4th property anymore.

Any input, comments appreciated.
Thanks
Bobportability



Comments

Neil Patterson

12:16 PM, 14th October 2014
About 4 years ago

Hi Bob,

Lenders portability rules can be quite strict and make it difficult to actually port/transfer the mortgage. These rules are normally held in the lenders current handbook and can change at any time as it does not form part of the original contract for the original sum borrowed and security.

Do you have a copy of BMS's current rules and have you asked them if they will even consider porting to a new loan if you already have the maximum 3 properties with them?

It is almost certain you will not be able to port the loan to a property where the LTV is higher than the current criteria though.

On the plus side you sound like you are in a very good position with your current mortgages especially if/when we win against West Brom.

To really assess your position properly you would need a broker with all your information to accurately assess your options against criteria.

I think the decision to buy another investment property is bigger than just trying to retain the existing rate although this could be advantageous if you do.

Mark Alexander

12:21 PM, 14th October 2014
About 4 years ago

I recently looked into porting a BMS mortgage, Howard Reuben was the advising broker who looked into it for me - see >>> http://www.property118.com/member/?id=314

LTV is limited to 75% and I need to qualify for their current criteria, which isn't a problem.

Other than that it seems to be quite straight forward but having said that, I've not actually done the deal yet because the property I am looking to sell is sticking a bit.
.

Howard Reuben CeMap CeRER

13:13 PM, 14th October 2014
About 4 years ago

Thanks Mark

Hi Bob

A mortgage is portable ... ONLY IF you and your new property both pass the latest criteria at the time of porting.

You are correct that Lloyds Banking Group (Halifax, BMS, Intelligent Finance, Bank of Scotland, TSB, C&G etc etc) only now allow 3 properties BETWEEN THEM, so you may have lost the opportunity to port it now anyway.

Other criteria to 'pass' would be clean credit status, credit scoring, property type being acceptable etc.

Hope this helps.

Robert Pais

14:11 PM, 14th October 2014
About 4 years ago

Reply to the comment left by "Howard Reuben" at "14/10/2014 - 13:13":

Thanks for your input Neil, Mark & Howard.

Apparently I can port the product but only at the current lending criteria, so 75% as you rightly say. The problem does seem to be the restriction on properties mortgaged with the Lloyds Banking Group as I referred to and Howard confirmed. I had including this redeemed mortgage 3 loans with BMS, but I have another with TMB who whilst no longer accepting new business are it seems part of Lloyds. That is infact the loan with the 4.95% SVR so it would have been nice to have got rid of that one but it seems that you cannot port to another lender in the group either, so looks like I'm stuck with it.
Thanks

John Constant

16:39 PM, 14th October 2014
About 4 years ago

Robert, just a small point for general interest. The situation with the Lloyds Banking Group is 3 BTL plus a residential, so if you have a residential mortgage with Lloyds (including C&G, IF etc) that would not count.


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