So pretty unique situation, we offered on a house in March, with the intention of purchasing it as our residential home and keeping a property I bought before our marriage as a BTL. Checked multiple times with current lender that we could port the mortgage and they were happy with the “let to buy” situation, reassured multiple times it was within their policy; they gave us an AIP for about £200k OVER the property value and I was very clear that we needer 95% to achieve this (we have to pay the increased stamp duty for second homes so needed most of our savings to pay this).
We’ve had a BTL mortgage agreed my current house, offer accepted on new home and begun the process. Process includes porting and increasing existing residential mortgage due to good rate (1%) and a chunky ERC (Santander, nearly 5 figures and will not reduce over term).
9 weeks into the process and Santander have told us at final decision that they will not do 95% and will only do 90%!!! I’m fuming at them for taking so long to tell me but essentially we don’t have an additional £25k to add to the deposit.
so options are:
- wait and save an additional £25k to get 90% LTV. Obviously lose this house and have to wait and see what the market and interest rates are like in 2-3 years time when we have more cash.
- stretch ourselves now to afford the £7k ERC, possibly need to borrow from family and get a 95% mortgage from a new lender at a probably slightly higher rate (though less high than buying in 2-3 years?!). We are expecting a small windfall in Jan that would mean we can pay back family and get ourselves back to having some cash savings.
For various reasons, selling my home is not an option, I have approx 40% equity though.