Family home mortgage changed from residential to buy-to-let

17th April 2018
INTERNATIONAL ASSOCIATE

Harry Derrick

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Family home mortgage changed from residential to buy-to-let
Harry Derrick
INTERNATIONAL ASSOCIATE

Harry Derrick

I recently assisted a client looking for a residential to buy-to-let mortgage change. Unfortunately, my client’s current broker had not been able to deliver a suitable solution. He, therefore, contacted Enness Mortgages; as a specialist broker, we pride ourselves on being able to find solutions for unusual cases, no matter the complexity.

My client was looking to refinance his current residential property, in order to fund the deposit for an onward purchase. His plan was to rent out his current property and move in with his family into the new, larger home. His current property was valued at £850,000.

However, his current broker could not find a lender who would offer a large enough facility. This is because most lenders will work from the expected rental income property will achieve when calculating the maximum borrowing against this property. Despite the value of his property, the rental income he expected to achieve would not be high enough to allow him to borrow the desired amount. This can be surprising for clients looking for a residential to buy-to-let mortgage change, as many such clients are inexperienced landlords and are used to residential property finance.

OUR SOLUTION

Fortunately, my client had significant personal income, which he was happy to use to support the borrowing. I, therefore, approached a lender who was happy to consider his personal income in addition to the rental income, when assessing the maximum lending they could offer.

There were a few further complications; my client and his partner were both self-employed, with fluctuating incomes, so this had to be taken into consideration. However, I was ultimately able to negotiate a solution, and secure my client the full £500,000 he was hoping to borrow to use as a deposit.

This was at a 5-year fixed rate of 2.89%, over a 25-year term. This is an excellent example of how the Enness Mortgages team are able to find solutions for complex cases, even those which had gone unsolved elsewhere. If you are considering a residential to buy-to-let mortgage change, I would be happy to advise you further.

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