Santander Mortgage issue
Discussion
Hello all,
I dont know if anyone can help with this.
I currently have two flats. One that I rent out, one that I live in.
The one that is rented out only has about 5k of equity in it and its currently rented out at 130% of the mortgage payment.
I have a LTV of 63% in the one that I reside in. What I want to do is release equity from this property by taking the LTV up to 75%. I would then use the money released to pay down some of the mortgage on the rented property.
I had two meeting with a Santander mortage advisor who said that this wasn't a problem and they'd get a decision in principle. After eventually getting hold of him, he said that the underwriter has come back and it's not something they can do. They will only do this if the rental property is already at 75% LTV. I asked why he hadn't told me this from the off as not only have I wasted nearly two weeks waiting, but I also have a search against my name. He relectantly apologised.
He didn't even say if they would accept me if I took the LTV of the rented flat down to 75% before finalising the mortgage. I don't really want to go down this route, but I can.
I was looking at a fixed rate of 3.29% for a 5 year fixed rate and a mortgage term of 15 years. With the 123 account, it would take the payments down a further £9 per month.
He has been useless throughout and I really dont want to go back to him to see if the above would be accepted.
Is this rental property (given the LTV and rental) going to be a problem for most lenders? Would people still pursue Santander with the offer of bringing the LTV of the rental property down or look elswhere?
Thanks in advance.
I dont know if anyone can help with this.
I currently have two flats. One that I rent out, one that I live in.
The one that is rented out only has about 5k of equity in it and its currently rented out at 130% of the mortgage payment.
I have a LTV of 63% in the one that I reside in. What I want to do is release equity from this property by taking the LTV up to 75%. I would then use the money released to pay down some of the mortgage on the rented property.
I had two meeting with a Santander mortage advisor who said that this wasn't a problem and they'd get a decision in principle. After eventually getting hold of him, he said that the underwriter has come back and it's not something they can do. They will only do this if the rental property is already at 75% LTV. I asked why he hadn't told me this from the off as not only have I wasted nearly two weeks waiting, but I also have a search against my name. He relectantly apologised.
He didn't even say if they would accept me if I took the LTV of the rented flat down to 75% before finalising the mortgage. I don't really want to go down this route, but I can.
I was looking at a fixed rate of 3.29% for a 5 year fixed rate and a mortgage term of 15 years. With the 123 account, it would take the payments down a further £9 per month.
He has been useless throughout and I really dont want to go back to him to see if the above would be accepted.
Is this rental property (given the LTV and rental) going to be a problem for most lenders? Would people still pursue Santander with the offer of bringing the LTV of the rental property down or look elswhere?
Thanks in advance.
Edited by Stomnnorm on Monday 24th March 09:35
This is the problem with seeing a Bank's advisor. They are essentially just 'yes' men who take you along the process saying 'it shouldn't be a problem' but they are not the decision makers. They either don't know their own criteria or aren't allowed to make a judgement call themselves and are told to get the applications through to the underwriters and let them make the decisions.
With regards to other lenders, there will be lender who will do this for you but it would be classed as a Debt Consolidation remortgage, which usually carries it's own specific criteria dependent on the lender.
With regards to other lenders, there will be lender who will do this for you but it would be classed as a Debt Consolidation remortgage, which usually carries it's own specific criteria dependent on the lender.
Thanks for your response Sarnie.
When I asked if I could speak to the underwriter, he said I couldn't and that he can't even speak with them! I thought this strange seeing as they work for the same company.
What would you do in my situation? Is it going to open up a lot more options if I get the LTV down on the rental property first? I can get this as a 'gift'.
This sounds like a silly question, but will it work more in my favour if I said I was buying a car with the money or doing some home improvements, rather than saying I was using it to clear some of my mortgage?
Cheers
When I asked if I could speak to the underwriter, he said I couldn't and that he can't even speak with them! I thought this strange seeing as they work for the same company.
What would you do in my situation? Is it going to open up a lot more options if I get the LTV down on the rental property first? I can get this as a 'gift'.
This sounds like a silly question, but will it work more in my favour if I said I was buying a car with the money or doing some home improvements, rather than saying I was using it to clear some of my mortgage?
Cheers
Stomnnorm said:
Thanks for your response Sarnie.
When I asked if I could speak to the underwriter, he said I couldn't and that he can't even speak with them! I thought this strange seeing as they work for the same company.
What would you do in my situation? Is it going to open up a lot more options if I get the LTV down on the rental property first? I can get this as a 'gift'.
This sounds like a silly question, but will it work more in my favour if I said I was buying a car with the money or doing some home improvements, rather than saying I was using it to clear some of my mortgage?
Cheers
Most lenders won't allow you to speak to the underwriters, they'd never get anything done if they were fielding questions all day long. I know it probably sounds biased, but as a broker we have appointed Business Development Managers who can step, sort things out and speak to the underwriters etc.When I asked if I could speak to the underwriter, he said I couldn't and that he can't even speak with them! I thought this strange seeing as they work for the same company.
What would you do in my situation? Is it going to open up a lot more options if I get the LTV down on the rental property first? I can get this as a 'gift'.
This sounds like a silly question, but will it work more in my favour if I said I was buying a car with the money or doing some home improvements, rather than saying I was using it to clear some of my mortgage?
Cheers
I obviously can't advise you to lie on any application form, that's not the way to do it.
What you need to understand is that no lender is going to be terribly enamoured with an increased LTV on your residential property to decrease the LTV on the property you aren't living in.....
Jockman said:
I would not be reducing the debt on a rented property.
Are you required to do this by your lender?
Thanks for your response. Are you required to do this by your lender?
The rental property is on the variable rate, which isn't very attractive. I was thinking of fixing it to get a better rate and before rates started to rise. However, without too much equity, my choices are limited.
Sarnie said:
Most lenders won't allow you to speak to the underwriters, they'd never get anything done if they were fielding questions all day long. I know it probably sounds biased, but as a broker we have appointed Business Development Managers who can step, sort things out and speak to the underwriters etc.
I obviously can't advise you to lie on any application form, that's not the way to do it.
What you need to understand is that no lender is going to be terribly enamoured with an increased LTV on your residential property to decrease the LTV on the property you aren't living in.....
I was just suprised that he couldn't talk to them directly. Will most lenders take the same view as Santander and want a LTV of around 75% on a property in the background?I obviously can't advise you to lie on any application form, that's not the way to do it.
What you need to understand is that no lender is going to be terribly enamoured with an increased LTV on your residential property to decrease the LTV on the property you aren't living in.....
I dont want the rental property to cause issues in the future if this is the case.
Stomnnorm said:
Thanks for your response.
The rental property is on the variable rate, which isn't very attractive. I was thinking of fixing it to get a better rate and before rates started to rise. However, without too much equity, my choices are limited.
I see your dilemma The rental property is on the variable rate, which isn't very attractive. I was thinking of fixing it to get a better rate and before rates started to rise. However, without too much equity, my choices are limited.
Would you be releasing sufficient revenues to make a meaningful reduction on the rented property? Once you fix in your potential for overpayment may become curtailed too. What happens if rates don't rise?
I note your point on 'blagging' it about what you want to spend the money on. It is really important on an open forum to state that you must at all times be truthful about your intentions and your actions must remain beyond reproach.
I mean, there is absolutely no way that I would approach my (previous) lender for a mortgage extension to extend my property then go and buy an Aston Martin DB9.
No way.
It just didn't happen...
Stomnnorm said:
I was just suprised that he couldn't talk to them directly. Will most lenders take the same view as Santander and want a LTV of around 75% on a property in the background?
I dont want the rental property to cause issues in the future if this is the case.
Every lender will view it differently, there isn't a standard set of lending criteria that all lenders adhere to....I dont want the rental property to cause issues in the future if this is the case.
Jockman said:
I see your dilemma
Would you be releasing sufficient revenues to make a meaningful reduction on the rented property? Once you fix in your potential for overpayment may become curtailed too. What happens if rates don't rise?
I note your point on 'blagging' it about what you want to spend the money on. It is really important on an open forum to state that you must at all times be truthful about your intentions and your actions must remain beyond reproach.
I mean, there is absolutely no way that I would approach my (previous) lender for a mortgage extension to extend my property then go and buy an Aston Martin DB9.
No way.
It just didn't happen...
Thanks Jockman. The rented flat isn't worth a fortune so not huge amounts of money are needed to decrease the LTV. If I released around 12% from the flat I live in, it would decrease the LTV on the rented flat from 93% to around 65%.Would you be releasing sufficient revenues to make a meaningful reduction on the rented property? Once you fix in your potential for overpayment may become curtailed too. What happens if rates don't rise?
I note your point on 'blagging' it about what you want to spend the money on. It is really important on an open forum to state that you must at all times be truthful about your intentions and your actions must remain beyond reproach.
I mean, there is absolutely no way that I would approach my (previous) lender for a mortgage extension to extend my property then go and buy an Aston Martin DB9.
No way.
It just didn't happen...
I know what you mean about keeping things to yourself. I was in two minds, but I thought if I was as transparent as I could be, then the feedback given would then be relevant.
Stomnnorm said:
Thanks Jockman. The rented flat isn't worth a fortune so not huge amounts of money are needed to decrease the LTV. If I released around 12% from the flat I live in, it would decrease the LTV on the rented flat from 93% to around 65%.
I know what you mean about keeping things to yourself. I was in two minds, but I thought if I was as transparent as I could be, then the feedback given would then be relevant.
That's a decent reduction and well worth considering - your LTV will fall below that of your primary residence !!!I know what you mean about keeping things to yourself. I was in two minds, but I thought if I was as transparent as I could be, then the feedback given would then be relevant.
I know it's a moot point but you do receive tax relief on the interest payments on your rented property so having a high debt on it isn't all bad news. I appreciate this is not your main concern.
Good luck
Hi,
For what its worth:-
Dont lie on a mortgage application, its fraud, if you do get caught out, you will not get credit again (at the least!)Lenders are getting quite clever at this now.
This sort of situation is far better put in the hands of a broker, especially as a lot of buy to let deals are only available through a broker.
Even though you transfer part of the debt on to your residential mortgage, you should still be able to claim tax relief on that part.
I am a Broker, I have been on this site a fair while, I have never seen a piece of advice by Sarnie, that I have disagreed with ( thats unusual for me,) I have never seen anything but praise on here for what he does. I would get in contact with him direct, and let him sort it. Remember any fees can be set against tax as well.
For what its worth:-
Dont lie on a mortgage application, its fraud, if you do get caught out, you will not get credit again (at the least!)Lenders are getting quite clever at this now.
This sort of situation is far better put in the hands of a broker, especially as a lot of buy to let deals are only available through a broker.
Even though you transfer part of the debt on to your residential mortgage, you should still be able to claim tax relief on that part.
I am a Broker, I have been on this site a fair while, I have never seen a piece of advice by Sarnie, that I have disagreed with ( thats unusual for me,) I have never seen anything but praise on here for what he does. I would get in contact with him direct, and let him sort it. Remember any fees can be set against tax as well.
Stevemr said:
...Even though you transfer part of the debt on to your residential mortgage, you should still be able to claim tax relief on that part.
Correct. The debt need not be secured against the asset, so long as it was taken out FOR the asset.It just gets a little bit messier to keep track of.
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