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Original poster

BTL mortgage and poor credit

37 replies

llamaanddrama · 13/08/2021 10:16

Would greatly appreciate advice.

I bought a property outright nine years ago with money left to me. It’s worth maybe £140,000 - that’s possibly a generous estimate, to be fair, but to give a rough idea.

I now want to buy somewhere else with my husband, and we want to remortgage that property to release some equity to allow us to do this.

However, it seems my credit isn’t the best. It isn’t exactly terrible - on score alone it’s just under 500 - but obviously needs improvement. There’s a handful of missed payments which have been brought up to date now but weirdly and unbeknown to me there’s a CCJ there, dating from august 2016. Two of the three main credit companies have reported it but one has not (Experian.)

We are with a mortgage broker but I wondered if anyone might be able to advise the best way to proceed.

OP posts:
BeeLady15 · 13/08/2021 10:57

What price is the property you wish to buy? Would you not be better off selling the property you own to use these funds to buy a bee property? That way it’s less risk for a mortgage company if they’re only lending a small percentage of the purchase price

Original poster
llamaanddrama · 13/08/2021 12:37

That’s definitely an option but it might be risky as it means my husband would be solely on the mortgage. No reason to think we’d split up but you never know.

But the main issue is it would probably mean we couldn’t buy the house. There’s a tenant in so bu the time we’ve served notice on them and done all of those things it’s unlikely the house we like would still be on the market.

OP posts:
HalzTangz · 13/08/2021 12:58

@llamaanddrama

That’s definitely an option but it might be risky as it means my husband would be solely on the mortgage. No reason to think we’d split up but you never know.

But the main issue is it would probably mean we couldn’t buy the house. There’s a tenant in so bu the time we’ve served notice on them and done all of those things it’s unlikely the house we like would still be on the market.

We have a BTL property, put your Tennant on a rolling one month contract. You only need to give one month's notice then, but any sensible Tennant will start looking elsewhere when a for sale board goes up
Original poster
llamaanddrama · 13/08/2021 13:03

I don’t think you can at the moment because covid. I think the earliest they could move out would be in 6 months.

OP posts:
Lemonlemon88 · 13/08/2021 13:06

Have you looked into the ccj and if it is on your file incorrectly if you didn't know about it?

CayrolBaaaskin · 13/08/2021 13:08

Op if you don’t sell the buy to let you will need to pay 3% additional stamp duty (SDLT) on the new property. Something to bear in mind. You can get a refund if you sell your second property within 18 months

Original poster
llamaanddrama · 13/08/2021 13:20

Thanks for that, yes, was aware but thanks for the heads up.

My main concern is not being granted a mortgage at all, even with DHs name on it (his credit is fine.)

OP posts:
Hoppinggreen · 13/08/2021 13:21

@llamaanddrama

That’s definitely an option but it might be risky as it means my husband would be solely on the mortgage. No reason to think we’d split up but you never know.

But the main issue is it would probably mean we couldn’t buy the house. There’s a tenant in so bu the time we’ve served notice on them and done all of those things it’s unlikely the house we like would still be on the market.

As you are married I don’t think you need to be on the mortgage from that point of view
NotMyCat · 13/08/2021 13:22

@llamaanddrama

Thanks for that, yes, was aware but thanks for the heads up.

My main concern is not being granted a mortgage at all, even with DHs name on it (his credit is fine.)

I've just got a mortgage alone with shit credit! My broker was incredible, but expensive
Original poster
llamaanddrama · 13/08/2021 13:22

Possibly but the main issue like I say is potentially losing the house we like which would be a shame. I’m just not sure if I might be turned down flat for a BTL mortgage? Not sure.

OP posts:
Original poster
llamaanddrama · 13/08/2021 13:23

That’s brilliant @NotMyCat Smile was it for a BTL one though?

OP posts:
NotMyCat · 13/08/2021 13:24

@llamaanddrama

That’s brilliant *@NotMyCat* Smile was it for a BTL one though?
It wasn't BUT it was the most complicated remortgage situation ever where we were going from 3 people on the mortgage to 1, and my credit is BAD, and consolidating debt as well. Nightmare!
Original poster
llamaanddrama · 13/08/2021 13:26

That’s really handy to know though. Thanks. Did it take long for it to get sorted?

OP posts:
TakeYourFinalPosition · 13/08/2021 13:27

@llamaanddrama Your broker is going to be the best person to advise, but is the CCJ settled?

You don't need to give 6 months' notice to tenants anymore - it's 2 months from 1st August.

A bridging loan might be an option but it'd likely be your husband who needed to take it on, and you'd need a realistic valuation of your flat and how fast it would sell, it's been a rough market for flats since Covid hit.

Does the rent being paid on the flat cover the associated costs? Mortgage, insurance etc?

Original poster
llamaanddrama · 13/08/2021 13:30

Ah that’s handy to know, thanks (again.)

So the CCJ isn’t settled - I only just found out about it - but from what I’ve read this seems a bit questionable. As what I don’t want is to reset the clock on it if you like!

It’s actually not a flat - sorry I’m not being pedantic, just that you said it’s a tough market for flats.

I own it outright but the rental income would probably cover the mortgage and costs but only just if we were to remortgage. We both have good incomes though.

OP posts:
HalzTangz · 13/08/2021 13:39

@llamaanddrama

That’s definitely an option but it might be risky as it means my husband would be solely on the mortgage. No reason to think we’d split up but you never know.

But the main issue is it would probably mean we couldn’t buy the house. There’s a tenant in so bu the time we’ve served notice on them and done all of those things it’s unlikely the house we like would still be on the market.

Why would the new house only be in your partner's name if you were to sell your house? Surely the smaller mortgage would be more achievable in both your names. That said if you are putting in 140k (sale from your house) and new house is say 200k (60k difference that you both pay 50/50), you would need to get legal paperwork in place to stipulate you would own the vast majority of the new house (best to have this should you ever split in the future)
NotMyCat · 13/08/2021 13:39

I started the process in March and it's with the solicitors now. Delays were mostly due to getting my parents off the deeds and paperwork needed from them

Original poster
llamaanddrama · 13/08/2021 13:43

@HalzTangz because I’m unlikely to be approved for the new mortgage as it’s pretty big. We are looking at adding me once the CCJ is off. But there’s no way round that for the BTL unfortunately.

OP posts:
Original poster
llamaanddrama · 13/08/2021 13:44

Thanks @NotMyCat

Wishing you every happiness in your new home Wine

OP posts:
BlackIsQueen · 13/08/2021 14:13

Not, have PMed you. Good luck Llama, hope you get your house

vivainsomnia · 13/08/2021 15:35

Why would you get a btl for a property you intend to live in?

vivainsomnia · 13/08/2021 15:38

Sorry just read you want to remortgage your current property. You will definitely struggle especially if you are not currently owner of another property. Natwest are a good one to try though.

TakeYourFinalPosition · 13/08/2021 16:02

@llamaanddrama Sorry, I’ve no idea where I got flat from Blush that should make it easier!

Is the CCJ something you owe? There’s a route of appeal, I believe.

Original poster
llamaanddrama · 13/08/2021 16:04

It’s quite difficult. While I don’t mind paying it what I don’t want to do is to effectively restart the clock on it. Much better to grit my teeth and wait it out for another twelve months.

But in any event since one credit checker doesn’t have a record of it I presume the mortgage broker can find a mortgage that uses this one … I hope.

The main issue seems to be that it’s a BTL mortgage and the criteria appears to be stricter.

OP posts:
ApocalypseNowt · 13/08/2021 16:07

CCJ's don't "go away". Once a creditor has a CCJ they can continue to persue the debt indefinitely and engage bailiffs. You need to deal with it.