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lilla d

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  1. Hi Simon, You're right in assuming that there are issues with renting the property to a relative, especially where the relative is the current owner of the property and would remain in the property as a paying tenant... Most lenders don't allow the seller to stay in the property and rent it back. I appreciate it that your dad is only a co-owner, but still. Then there's the problem of renting to a relative, which many lenders don't like. However, it may just be possible with a few lenders, so I recommend that you speak to a broker about the specifics. There are quite a few of us brokers here, but we can only give generic info on this forum, whereas you'll need an actual solution with figures.
  2. Hi guys, Finally I get a chance to give an update. Having spoken to various lenders and specialist BTL brokers, the consensus was that lenders don't normally have this LTV condition - some banks even cited the rule of Treating Customers Fairly, i.e. as long as the client pays their mortgage, they wouldn't penalise them just because the property value happened to reduce. Only two lenders had no such concern and indeed reserved the right to do something about it, if the LTV increased. The people I spoke to also said that they had no knowledge of ever enforcing the condition, but obviously they can't know about every case. In short - Dino managed to get a mortgage from one of two lenders who has this condition, but except for these 2 lenders out of a hundred or so, lenders don't reserve the right to require you to provide extra collateral, reduce your mortgage to the original LTV level or call in the mortgage in case your LTV goes above the originally agreed level. To note, the situation may have been different in past and may change in the future, as lending criteria is constantly evolving. However, as we have already agreed on it, lenders are highly unlikely to enforce this condition. So Diphotex, you should be just fine :)
  3. Hi Dino, Thank you for sharing it, interesting to know that there's a lender who says it in their small print. To give realistic feedback to people, however, it would also be useful to know how many times banks have actually requested people to lower their LTV, provide extra collateral or call in a mortgage. As you say, it makes zero sense for the lender, so even if a bank reserved the right, would they do it? Highly unlikely. I've never heard of it, but just out of interest, I'll ring a few lender contacts tomorrow to see what they say and post an update.
  4. Hi there, You definitely need a solicitor for a remortgage when changing lenders and mortgage type. Even if you were to go direct to a bank, you'll still need a solicitor. When you remortgage to a new lender, sometimes the lender gives the solicitor for free, sometimes they don't and you have to appoint one. They - check the Land Registry title deed, - when you own a flat, they would also check the property lease and some details with the freeholder/management company to ensure that the details are acceptable for the new lender - on completion, they request a settlement statement from the old lender, the money from the new lender and any potential shortfall from you or if there's a surplus, they send it to the solicitor handling the purchase transaction - after completion, they update the Land Registry, so the title deed shows the new lender instead of the old one What does a surveyor do in case of a remortgage? Exactly the same as what they do for a purchase. They check the property's condition to make sure that it's worth what you say and that the property is acceptable for the new lender. I hope the above clarifies the matter
  5. Hi Diphotex, I've been a broker for nearly a decade and out of all the above, the only part I can agree with regarding the risk of calling in a mortgage is this: The bank would NOT call in your mortgage just because you go above the original LTV. They may not give you a new deal and you may not be able to remortgage to another lender either, so you may be stuck on the SVR, i.e. become a mortgage prisoner, but as long as you make the monthly payments and use the property as per the agreed use (i.e. the BTL property is rented out or a resi is property is lived-in by you and/or your family), no one will call in your mortgage. Banks make money from you paying your mortgage, i.e. you paying interest, and from securitisation, so it's not in their interest to call in your mortgage. So coming back to the original point, as long as you don't break any conditions (and going above the original LTV won't be one of them), the bank won't call your mortgage in.
  6. As your friend is an EU national living in the UK, it's not a specialist mortgage, certainly not expat. Granted, the lender options will be limited when someone is looking to buy for over £1m, especially if they don't have a big deposit. The reason behind is that lenders have a max amount that they are happy to lend on 85-90% LTV basis. For example, HSBC would only lend 80%, when someone would like to borrow £500k-£1m. And of course, there are a million other factors that lenders consider Considering that I'm a broker and regularly deal with high value purchases, would be happy to look at your friend's situation as well. I'll send you a PM with my details.
  7. Hi Stefan, Technically, you could do what you propose, i.e. you could do a product switch to a new tracker deal, which doesn't have early repayment charge and then redeem it when you sale completes. If your product switch request is processed this week, then you could be on the new deal as of 1 Aug, otherwise it'll switch on 1 Sep. And no, once you switched, you switched, you wouldn't be penalised, if the new deal doesn't have an early repayment charge.
  8. Hi there, I'm afraid I'm not sure whether your friend lives in the UK or not, as I'm not sure whether you put the bold comments into the quoted section or they were part of the quote. If your friend lives outside of the UK, has never had any connection to the UK, then the options will be very limited, but not necessarily impossible and indeed he/she should seek broker help. If your friend lives in the UK (even if for less than 3 years), then it's still a good idea for them to speak to a broker, but there will be more lender options. OK, scrap what I've just said above, as I've just seen that the comments in bold reflect your friend's situation. In this case, the short answer is: yes, he/she can get a mortgage, so speak to a broker and they'll get the best deal from a suitable lender who can accept less than 3 years in the UK and income from a new job.
  9. Hi Jay, This information is correct: - until Apr 2021, it's ok that you're not a first time buyer - as of Apr 2021, it won't be ok for a Help to Buy purchase, so you won't be able to secure a property with the Help to Buy scheme, unless the rules are changed in the meantime
  10. Hi Dan, I'm a mortgage broker, so not entirely unbiased when I recommend that you find a mortgage broker to help you through this purchase. I say this, as I can see how much information/help you'll need during the process and the internet/friends/family may not be the most reliable source (as eager as everyone will be to offer their opinion/experience/advice). A broker's job is to advise you based on your specific situation as well as based on what is available on the market and then arrange the most suitable mortgage for you. In terms of costs, the good news is that you have massively overestimated the budget for costs, especially now that you won't have to pay stamp duty. However, whatever is left from that £5k, you can spend it on refurbishments and new furniture... Finally, just to note, while you may not mind whether you buy your first property for yourself or for investment, it makes a massive difference in terms of mortgage options. This is one of the reasons, while I recommend that you engage a mortgage broker - to discuss things and to get a better understanding how this whole process works.
  11. You would technically be a first time buyer when you buy a property in the future for yourself or for investment purposes. However, the mortgage you'll have with your friend will be counted as a credit commitment and will potentially reduce how much you can borrow for your own property. Does this answer your question?
  12. Hi there, I'm a mortgage broker, so let me also offer my perspective. Taking a new deal from the same lender is really very straightforward and virtually no questions are asked. Getting a consent to let is also normally quite straightforward, you tell the lender that you intend to travel the world and then come back to your normal life, but in the meantime you'd rent out the property. Lenders will say ok, no problem, but indeed there may be an admin fee or extra interest charged. They don't do BTL-type assessment, but they may ask if you have savings in case you can't rent it out, etc. In other words, based on your original post, you should be fine. However, if you ask for the consent to let first, you are highly unlikely to be able to secure a new deal afterwards. Change your deal first, which is normally possible in the last 3 months of the deal without a penalty, make at least one month payment on the new deal and then apply for the CTL with a future tenancy start date. I would also recommend that you don't actually rent it out until you have the CTL approved. This way, you're not committing mortgage fraud and everyone is happy.
  13. Hi, Instead of getting a 2nd residential and then remortgaging the original property onto a BTL deal, you should do the two mortgage transactions at the same time: - get a so-called let-to-buy (LTB) mortgage on your current property and - get a normal residential mortgage on the new property The two transactions would complete on the same day, which would eliminate the problem of getting a 2nd resi, trying to explain why you need two resi mortgages, worrying about how much deposit you need for the new property, etc etc etc. However, if you are locked into a deal on your current home, then you could just ask for a consent to let from your current lender. This will mean that most lenders will disregard it as a residential mortgage when assessing your potential for the new residential mortgage.
  14. Hi there, Well, the answer really depends on what actually is happening with your wife's property. The government backed scheme is called Help to Buy, but with this, you own 60-80%, rather than 20%. The other scheme (Shared Ownership) is with the involvement of a housing association and you buy minimum 25% share. Not sure which one you mean? In theory, you shouldn't rent out either and you wouldn't normally get a BTL mortgage on them. However, you could ask for a consent to let from the mortgage lender and from the Help to Buy agency / Housing Association as appropriate, which they normally provide. Does this help?
  15. You are very welcome and happy to hear that at least we brokers are giving you consistent feedback / advice. Hope you'll manage to find a good single household BTL and then you'll be well set for the potentially more profitable HMO investment!
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