Mortgage Question (Sarnie)

[CaptainSlow]

I'm looking to buy another property local to me if I can take advantage of a reduction in house prices this summer and very low interest rates. Initially it will be btl.

Currently have a house worth £675k with a nominal outstanding mortgage (Nationwide) and £120k sat in an overpayment account.

House I'm considering would be £300k, I can cover stamp and other costs, I could put in another £20k if needed but would prefer to keep that aside.

I know Nationwide wouldn't let me have the extra £180k against my current house and may not want to let me have the £120k back for a BTL.

So I guess the options are in order of preference

1. Find another lender that will let me release £300k against my house for the purpose of a btl
2. Draw down the £120k and find a btl lender for the £180k
3. Find a btl lender for £300k (won't happen for ltv reasons)

Any thoughts?

[Sarnie]

CaptainSlow said:

I'm looking to buy another property local to me if I can take advantage of a reduction in house prices this summer and very low interest rates. Initially it will be btl.

Currently have a house worth £675k with a nominal outstanding mortgage (Nationwide) and £120k sat in an overpayment account.

House I'm considering would be £300k, I can cover stamp and other costs, I could put in another £20k if needed but would prefer to keep that aside.

I know Nationwide wouldn't let me have the extra £180k against my current house and may not want to let me have the £120k back for a BTL.

So I guess the options are in order of preference

1. Find another lender that will let me release £300k against my house for the purpose of a btl
2. Draw down the £120k and find a btl lender for the £180k
3. Find a btl lender for £300k (won't happen for ltv reasons)

Any thoughts?

Have nationwide actually said they wouldn't lend the £180k to you? This isn't usually a problem as long as normal lending parameters are met such as affordability etc etc

If the £120k is sat in an over payment account, you shouldn't have to give any reason at all to draw the money back.

1) this shouldn't be a problem if you are happy to have the funds secured against your Residential property. Will mean lower rates over a BTL mortgage so you won't need to go through two mortgage applications...will also mean that you would effectively be a cash buyer.....beware that a lot of lenders won't just allow you to raise the money and bank it, some will want a simulataneous transaction, to ensure where the funds are going to.....

2) You could do this for sure.

3) If you want to stay with prime rates and fees, then you need to keep the LTV to 75% or below so max lending of £225k not £300k I'm afraid.............

Hope that helps!

[CaptainSlow]

Thanks for the quick response Sarnie. I know Nationwide don't let you borrow more for btl reasons. Indeed I'm not sure I can get the overpayment back (they won't for mortgages after March 2010).

I think the route will be option 1 with a new lender. What sort of rates/fees would I being looking at for a 5yr fix for £300k on a £675k property?

Also, are there options for part I/O?

[Sarnie]

CaptainSlow said:

Thanks for the quick response Sarnie. I know Nationwide don't let you borrow more for btl reasons. Indeed I'm not sure I can get the overpayment back (they won't for mortgages after March 2010).

I think the route will be option 1 with a new lender. What sort of rates/fees would I being looking at for a 5yr fix for £300k on a £675k property?

Also, are there options for part I/O?

Expect rates to be from circa 1.4% upwards.......standard arrangement fee is £999.........but there will be options for fee free products but with higher rates, depends which comes out cheaper over the five years......

There will be options for I/O depending on various parameters such as loan size in total, LTV, your income and how you propose to repay the balance.............

[CaptainSlow]

Thanks, I'll pm you if/when things progress.

[Sarnie]

No problem at all!