Clearing my mortgage and taking out a loan

[GriffG]

Just after a bit of advice guys

I have 39k left on a my previous property that I now rent out as I live with the better half, it’s worth about 85k. The mortgage is up for renewal in Feb however I assume I would have to remortgage as a buy to let?

I’m still on my previous mortgage rate as my bank said it’s ok to stay on it until the term ends.

Here’s the main problem, I have 41k in the bank, however I’m renovating a property that I plan to live in forever and need about 20k to finish it off, so I was thinking about clearing the mortgage so I don’t have to go on a silly btl rate and taking out a loan for cash in the bank and using the rent and my wages to clear the loan asap.

Is there a better way around this, are there cheap loans out there atm?

[Condi]

I suspect even a BTL mortgage would be cheaper than an unsecured loan. Also, if you just need the cash for a few years there is no need to renew the mortgage - depends how much over base it reverts too. Why not leave it to revert to the SV rate and pay back as quickly as possible.

[GriffG]

I have thought about letting it revert, I’m not sure what that would revert to and if I can legally rent a property out on this type of mortgage?

I did read about some way of getting close to zero percent when borrowing some money but I can’t remember what it was, but I would have to clear the borrowing extremely quickly I remember that!

[Sarnie]

GriffG said:

Just after a bit of advice guys

I have 39k left on a my previous property that I now rent out as I live with the better half, it’s worth about 85k. The mortgage is up for renewal in Feb however I assume I would have to remortgage as a buy to let?

I’m still on my previous mortgage rate as my bank said it’s ok to stay on it until the term ends.

Here’s the main problem, I have 41k in the bank, however I’m renovating a property that I plan to live in forever and need about 20k to finish it off, so I was thinking about clearing the mortgage so I don’t have to go on a silly btl rate and taking out a loan for cash in the bank and using the rent and my wages to clear the loan asap.

Is there a better way around this, are there cheap loans out there atm?

BTL rates under 2%...............thats cheap money..............

[GriffG]

Sarnie said:

GriffG said:

Just after a bit of advice guys

I have 39k left on a my previous property that I now rent out as I live with the better half, it’s worth about 85k. The mortgage is up for renewal in Feb however I assume I would have to remortgage as a buy to let?

I’m still on my previous mortgage rate as my bank said it’s ok to stay on it until the term ends.

Here’s the main problem, I have 41k in the bank, however I’m renovating a property that I plan to live in forever and need about 20k to finish it off, so I was thinking about clearing the mortgage so I don’t have to go on a silly btl rate and taking out a loan for cash in the bank and using the rent and my wages to clear the loan asap.

Is there a better way around this, are there cheap loans out there atm?

BTL rates under 2%...............thats cheap money..............

Where did you see those rates too?

[King Herald]

GriffG said:

I have thought about letting it revert, I’m not sure what that would revert to and if I can legally rent a property out on this type of mortgage?

I did read about some way of getting close to zero percent when borrowing some money but I can’t remember what it was, but I would have to clear the borrowing extremely quickly I remember that!

We rented out our family home several years ago, after living in it for four years. We had a fixed 5% rate for 7 years, and when that finished we just went onto normal rate, 1% over BOE rate I think it was.

I had a letter of permission to rent the place out from the lender, but when the 5 % rate lock in finished there was no mention of changing the type of mortgage, or remortgaging or anything.

[GriffG]

King Herald said:

GriffG said:

I have thought about letting it revert, I’m not sure what that would revert to and if I can legally rent a property out on this type of mortgage?

I did read about some way of getting close to zero percent when borrowing some money but I can’t remember what it was, but I would have to clear the borrowing extremely quickly I remember that!

We rented out our family home several years ago, after living in it for four years. We had a fixed 5% rate for 7 years, and when that finished we just went onto normal rate, 1% over BOE rate I think it was.

I had a letter of permission to rent the place out from the lender, but when the 5 % rate lock in finished there was no mention of changing the type of mortgage, or remortgaging or anything.

Interesting! I’ll have to double check just in case!

[Sarnie]

GriffG said:

Where did you see those rates too?

I seen them on illustrations given to clients in recent weeks..............mortgage money is cheap currently........makes little sense to redeem a mortgage and then take more expensive unsecured lending.............

[GriffG]

Sarnie said:

GriffG said:

Where did you see those rates too?

I seen them on illustrations given to clients in recent weeks..............mortgage money is cheap currently........makes little sense to redeem a mortgage and then take more expensive unsecured lending.............

I gotta admit that I don’t quite understand what I’m looking at when I’m searching buy to let rates, they state rates of around 2% which reverts to around 5%? What does that mean?

[AdamL7]

Have you looked at these?
https://www.moneysavingexpert.com/credit-cards/sto...

[GriffG]

AdamL7 said:

Have you looked at these?
https://www.moneysavingexpert.com/credit-cards/sto...

I think that was what I Couldn’t remember reading about! Cheers for that, I’ll look into how it could work for me!

[audidoody]

GriffG said:

I gotta admit that I don’t quite understand what I’m looking at when I’m searching buy to let rates, they state rates of around 2% which reverts to around 5%? What does that mean?

It means after the fixed rate period it reverts to the standard variable rate,

[King Herald]

audidoody said:

GriffG said:

I gotta admit that I don’t quite understand what I’m looking at when I’m searching buy to let rates, they state rates of around 2% which reverts to around 5%? What does that mean?

It means after the fixed rate period it reverts to the standard variable rate,

Can you simply sign up for another fixed rate period, or do you actually need to go through the whole remortgage palaver?

[GriffG]

King Herald said:

audidoody said:

GriffG said:

I gotta admit that I don’t quite understand what I’m looking at when I’m searching buy to let rates, they state rates of around 2% which reverts to around 5%? What does that mean?

It means after the fixed rate period it reverts to the standard variable rate,

Can you simply sign up for another fixed rate period, or do you actually need to go through the whole remortgage palaver?

I’m not a 100% sure really, I just assumed you couldn’t rent a house out unless your mortgage is buy to let? For insurance purposes?

[King Herald]

GriffG said:

I’m not a 100% sure really, I just assumed you couldn’t rent a house out unless your mortgage is buy to let? For insurance purposes?

Nope, not unless it has all changed in the last 8 years.

We had to get special insurance for renting, not just normal house insurance. Covers less, costs more.

[Sarnie]

King Herald said:

Nope, not unless it has all changed in the last 8 years.

We had to get special insurance for renting, not just normal house insurance. Covers less, costs more.

Yep, you need Landlord insurance.............

[Dan-Fresh]

Griff, have you spoken to a mortgage broker? I'm sure one would give you a bit of advice on this without charging?

[GriffG]

Dan-Fresh said:

Griff, have you spoken to a mortgage broker? I'm sure one would give you a bit of advice on this without charging?

I haven’t no, I’m not sure what the deal is with brokers, all my mortgages have just been through banks, I’ve searched around and got the best one for me, this is the first time things have changed in the type of mortgage I possibly need. Not even sure how to go about finding a broker to trust??

[Dan-Fresh]

We have one we use, he’s actually in the office next door to us. I can ask if he’ll give you some free advice if you like? He owes us a few favours.

[GriffG]

Dan-Fresh said:

We have one we use, he’s actually in the office next door to us. I can ask if he’ll give you some free advice if you like? He owes us a few favours.

That would be amazing! I’ll owe you a few favours as well!