Originally posted by mcgrco
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Let's see if I understand this correctly. You recently purchased a flat cash, 95% personal funds and 5% company funds. You have rented this flat out to the council for a minimum period of 3 years.
Your old flat that you still live in is mortgaged with Abbey with a current LTV of 32%. Abbey are refusing to give you a further loan advance because you have less than two years finalised accounts.
You have two options:
1. Remortgage you old flat
You can remortgage your old flat with a another lender that is more contractor friendly. Unless you have two years accounts Abbey normally doesn't want to know. But you can sometimes appeal to the underwriters.
The trouble with lenders is that they have a simplistic view of what qualifies as relevant earnings for lending purposes. Sadly Abbey is one of those. However, there are lenders that will look at your application with 1 years accounts. A good mortgage adviser can also get you a mortgage offer based on your contractor rates (up to 4-5 times annualised contract rate) and will not require 2 years accounts, like most conventional lenders.
2. Get a BTL mortgage on your new flat
I agree that BTL mortgages charge an interest rate which is considerably more than residential mortgage deals (around 4.5% to 6%). But you can get BTL let mortgages with arrangments fees of 1.5% or less. BM Solutions have same great rates right now. Bear in mind that most buy-to-let lenders want rent to cover 125% of the mortgage interest-only repayments.
If you still continue to have problems and need help, feel free to contact me.
Good luck.
John Yerou
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