Anyone remortgaged to do a let to buy?

[LyraSilvertongue]

We want to remortgage our house to release enough capital to buy another one. We would need to get permission to let it straight after receiving the funds.
Because of this our financial adviser says we'd have to get a buy to let mortgage but the rates are about 2% higher than residential mortgages and would make it unaffordable.
Has anyone done this and did you get permission to let it straight away?
Any help gratefully received.

Thanks QS.
Anyone else got any wisdom to impart?

We were unable to sell our flat in 2000 so we took out a buy to let mortgage on the flat and bought a new house as well. Lived in new house and rented flat out. However we owned 2/3 of the flat before embarking on this and also had enough in savings to put a decent sized deposit on the house we are now in. However this was in 2000 and house prices were much lower. Interest rates were also falling whereas now they are rising.
I would think of the following:

Do you have a rainy day fund to cover any periods when the house has no tenant?
How much would you need to spend to rent the first house out (decorating, electrical check etc.)?
Is the first house in an area with a good rental market?
Could you afford to pay 2 mortgages if interest rates continue to rise?
How secure our your incomes?

I would not embark on this at the moment as there is so much uncertainty over how much house prices will fall, how much interest rates will rise and risk of redundancy (depending on one's industry).

If you are really keen on the house I would try and sell in order to buy rather than let..unless you have 1000s of rainy day money saved up to take on a second house and let one out. I think to take on a second property now you would need to be in it for the long term until property prices go back up.

Let to buy is relatively straight forward. I assume you want to raise funds on your house inorder to buy the second home to live in. You need to find a lender that is sympathetic to your original mortgage. Bank of Scotland would be a typical choice but do lok at their rates as rates have gone up lately.
You will need to find a rental value for your property (Your estate agent should help you they usually need to be ARLA registered (Association Of Letting agents))as well as this will be offset against your mortgage payment ideally the rent will be at least that of the mortgage payment if not 25% more..
You can change the insurance easy enough and I would do so just so you have protection.
Your choice is limited purely because of the recent decline in mortgage products in the market place.
You would probably need to change your existing mortgage if you want to raise funds and the amount you want to borrow will be disctated to by the rental value of your property. You could just remortgage and not say anything but you would need the remortgage to complete ideally as the second mortgage would show up when they check your records and they will see you have multiple aplications and will start asking questions.
Sorrry if this is disjointed but I will keep an eye out if you have any other questions

hi we have been refused permission to let recently unless we were moving abroad and then only allowed for a year, yes you could do it without telling lender but that would invalidate your buildings insurance.
Also you can only get tax relief on the amount you pay in interest not off your capital.

We have been lucky the women who wanted to rent ours is now buying it!! Although we have dropped original price by 20%

we have a mortgage with ING

Thank you all. You've given me lots to ponder over the weekend.

Biggitdad, you sound like an expert. Do you work in the mortgage industry? I'll certainly try BoS.

We've had our offer accepted on a house so I'll have to get this sorted asap.

Lyra, yes I do. You need to find an IFA or broker who knows what they are doing and are familiar with what you are trying to achieve.

We're using one at the moment who seems a bit clueless. he came up with some crazy plan that would cost us £500 a month more than we can afford
Maybe I'll try to find another one.

To be fair to him it might cost you more because of the way interest rates are now. But as you said try another broker or two and see what they come up with. You should be able to get enough information over the phone if you tell them the details and figures of what you are trying to do.
Again the more you speak to people the more you will understand aout what they are proposing

Not read the whole thread but if you are only raising money on your main home, not taking a mortgage out on the 2nd home then it doesn't have to be a buy to let mortgage. hth

As I meant to say do not be afraid to ask questions

Lyra here my dp can help you out if you want to do more research.

congrats on having the offer accepted - good luck in sorting everything.

Great your offer has been excepted, congratulations !

As BGD said, the rates have all shot up recently, "mayhem" was the precise quote from my level headed broker the other day, so the figures he quoted may in fact be the reality.

I think you are being very brave to attempt this at the moment, but I'm sure you've made contingencies for the market not picking up until something like 2017 as some experts have predicted (what do they know though ?!) and the rest of the things that people have mentioned on the thread,so I have my fingers firmly crossed that it works out for you

Thanks everyone.
Lilyloo, I'll email your DP.
Biggitdad, do you know of any mortgage lenders who do let to buy mortgages? They seem to be few and far between.