Let-to-buy mortgage refused - broker at fault?

[Paintedocean]

Realise you can’t be complacent with the financial situation as it is but I was confident I would secure a reasonable deal.

LTV is c 35%; I have no debts other than mortgage; Credit rating is high (999 on Experian); regular use of a credit card which is paid off monthly. Take home salary is over £2000.

Tenant has moved in - done through an agent, standard tenancy agreement, 18 months @ £1700 which easily covers mortgage and expenses.

I’m moving in with my partner so not buying another property and this apparently is the problem for many lenders. Broker selected Leek as according to her they are one of the few for whom this wouldn’t be a barrier and now - after 8 weeks of waiting - I’ve been told they won’t give me the 5 year fix I was originally offered because I’m not buying. Have offered a discounted tracker instead.

At no point have I been asked for any proof that I have a tenant despite the broker saying the lender’s concern is that I will be living in the property.

AIBU in thinking I’ve been massively let down by the broker and is there any point in contacting the building soc myself?

i did some comparisons back at the beginning which is why I decided to remortgage as there were much better rates than those being offered by my current provider - Nationwide. There were also some restrictions around what would happen at the end of the term

I was exactly the sane situation as you and found it difficult too. In the end, I found I could go with Birmingham Midshire. I found them myself but could only deal with them through a broker who was crap, but that's another matter. I got a 3 year fix with them. After the 3 years, went directly with NatWest, got a much better deal and the process was efficient and very quick. Got a 5 year fix deal.

Do your own research. Many brokers are really not the experts they claim to be.

Escalate your complaint with the brokerage - sounds like he’s given bad/wrong advice. Before going elsewhere I would see if a formal complaint to his boss sorts this

It’s just so gutting as they kept telling me it was just a slow process and interest rates have gone up twice since I started. Definitely going to complain but not sure it will change my situation given rates have gone up.

also worried about starting again with a new lender as having had one rejected will presumably harm my credit rating

So does the current mortgage you have actually allow you to have a tenant in your property ?

No - but the BS are aware - basically they give you a grace period when you tell them that you’re remortgaging and they said it would be fine if there was an overlap.

You definitely need a BTL, I have a very similar situation save for I do have a mortgage on the house I live in too.

Be warned, some lenders are very strict about BTL criteria if you are looking for interest only. I remortgaged earlier this year with the bank I do all my banking with, so know me very well, I have perfect credit rating and they almost refused me a BTL mortgage on a piddly amount because I didn't have a 'repayment plan' - the plan of selling the house didn't count, and they would only acknowledge one third of the value of a S&S ISA. I eventually had to negotiate with them based on the monthly payment as against my monthly income (less than 5%!) and they relented.

My advice would be to get a better broker or just make the application yourself, but asap as rates are changing daily. It does seem like your broker just got it wrong.

I don't see why the fact you already own it should prevent a remortgage as BTL. When a property which was initially bought as a BTL is remortgaged with another lender it is already owned? Don't see how that's any different to your situation.

According to the broker the issue is that I’m moving but not taking on a mortgage so their concern is that I will actually be living in the property. Despite the fact I have a tenant - arranged through an agent - who has signed a tenancy agreement, paid a deposit, first month’s rent etc

I worked for years for a major high street mortgage lender. Let to buy has nothing to do with whether you release equity or not, it's simply moving out of a residential property and converting it into a rental property and buy another one
The area where you might have problems is the lender asking if you ever intend to live there again (which may very well be the case if you were to split up with your partner) and some will refuse if you state your intention is yes I intend to move back there.
However if you say no, because I doubt you intend to break up with your partner, it should all be good BUT it will come under regulated buy to let which can be more tricky as the standard buy to let (find a house, buy it with the sole intention of renting it out) isn't regulated, but accidental landlords (usually termed consumer buy to let) are regulated which is probably why they've offered a different rate because it's a different type of contract

Thanks candles, that’s really helpful. The question is - was the broker at fault for suggesting that a product with that lender? To me the point of going through a broker is so you don’t waste weeks applying for something for which you don’t meet the criteria. Assuming you van back up all your financials etc, which I have done