Remortgage from BTL to residential
I’d be grateful for advice on what should a simple issue, but isn’t.
I own two properties with similar value. I live in one of them with a residential mortgage of 50% LTV. I let the other one out with a BTL mortgage again at 50% LTV. I’d like to move into the BTL property and start letting the one I currently live in. Solution: remortgage the current BTL with a residential mortgage and remortgage the residential as BTL. Simple.
However that’s proving harder than it sounds:
(1) I can’t port the residential mortgage as this is usually only allowed where a new property is being purchased, which it isn’t in this case
(2) Several residential lenders won’t consider a remortgage application unless the applicant is living in the property at the time of application – but unfortunately I can’t move in until the new mortgage is in place
(3) In order to see a BTL property as self-financing, several lenders will want to see evidence of rental income, but I can’t start letting the property until I’ve moved out, and I can’t move out until the new mortgages are in place
Can anyone think of a solution to this chicken-and-egg dilemma?
Thanks
Alex
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Member Since February 2011 - Comments: 3453 - Articles: 286
10:50 AM, 24th August 2015, About 11 years ago
Hi Alex,
Have you tried asking the lenders for temporary permission to swap the usage type of each property as this may buy you the time to sort out the above issues.
I know on Le to Buy you can get an offer that is conditional on only completing the day you move property, but this would need researching.
No proof of rental income should not be a big problem as the rent is normally assessed by the lender’s Surveyor when they have a Valuation survey done.
I hope that helps a little, but if you need assistance finding the right lenders let me know and I will get one of our fully qualified IFA’s to work with you. >> [email protected]
Any specific advice would be regulated under the FCA as it involves your main residence.
Member Since June 2013 - Comments: 381 - Articles: 61
12:24 PM, 24th August 2015, About 11 years ago
Alex, porting a mortgage is indeed an option for some people, as is Let To Buy for others, or even a remortgage on to a BTL too, however have you tried the 4th option, asking for ‘consent to let’ (CTL)? If you request in writing to let your property out and you detail the reasons why (which need to be plausible, transparent and justifiable) then this may be your solution instead?
With regards to switching your BTL to a resi, you may even get an agreement from that lender too? Alternatively, with a CTL in place, you may then be eligible for a traditional new resi mortgage to remortgage your BTL mortgage deal on to.
As Neil suggests, the first place to start is by working with a professional mortgage adviser.
Howard