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Our property investment expert is Jeni Browne, Sales Director at
Mortgages for Business
www.mortgagesforbusiness.co.uk
Tel: 0345 345 6788
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Question
Switching to a buy-to-let from a residential
I own a house which I purchased with a residential mortgage in 2019. It’s a five-year fixed rate deal which is due to expire in 2024.
Last year I moved to Brussels for work and my family and I relocated. The plan was for us to stay for one year, but it’s looking like we will now be staying for longer.
Currently, I rent out our house in the UK, which our lender has allowed us to do on the basis it was a short-term arraignment. But now, we plan to stay, I don’t think this arrangement will apply.
Do we need to switch to a buy-to-let mortgage and, if so, will we be liable for the penalty for leaving our residential mortgage early? I believe there is a 2% fee as we are in year four of the mortgage. Thanks for your help.
Answer
I would certainly encourage you to pick the phone back up with your current lender and see how long you can keep this arrangement in place.
This is because your current interest rate is going to be lower than anything you would get now, plus you’ll want to avoid the early repayment charges if possible.
I suspect your lender may let this arrangement remain in play for now, but would not look to offer you a new rate once your current deal ends.
However, if they can’t help you, then yes, you do need a buy to let mortgage. If this is the case, you will need to seek out a lender that will lend to expats – not all do so, so it would be a good idea to speak to a whole-of-market mortgage broker that will be able to find the best lender for your situation.
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Question
Buying a house in France – can we get a mortgage in the UK?
We are considering purchasing a property in France which we would use for around three to four weeks of the year as a holiday home and rent out to holidaymakers for the rest of the time.
How would the finance for a property of this kind work? Would we need to get a mortgage in France or can someone here in the UK help? I was hoping there might be a UK-based broker, for example, who could help as navigate the system.
Answer
Goodness, this sounds wonderful! So, you will invariably need either a French bank, or a UK bank that has a presence in France (like HSBC or NatWest International).
There are UK-based brokers who specialise in offshore mortgages, so I would hope that google will be able to assist you more on this one… Good luck!
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Question
Purchasing a buy-to-let in 2023
With house prices starting to slow down I am considering purchasing a buy-to-let in 2023. It’s been a long-term plan of mine for some time as I am hoping it will provide an income in retirement.
I am 52, own a residential property with a small mortgage remaining and I have around 40% of the value of a home to invest. Would I be a suitable candidate for a mortgage and is there anything else I can do to improve my prospects?
One thing which is holding me back is the current high mortgage rates so any advice on finding a good deal would be valuable.
Answer
You sound like the perfect candidate to get a buy-to-let mortgage, so please don’t worry about that!
Interest rates should ease down a little as we head into the Spring, so I would hold tight for now, let the property market settle, and wait to see where rates are in April.
The other thing you can do to help ensure you get the best rate is speak to a mortgage broker, ideally one who specialises in buy to let.
There is a very good firm called Mortgages for Business… other brokerages are also available!
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Question
Inheriting a buy-to-let: Help me understand more about the mortgage
My mum is in end-of-life care and I am starting to consider sorting her affairs. One specific concern we have is with regard to a buy-to-let property, which is mortgaged.
She has stated in her will (as I understand) that this will be passed to me. So, what will happen to the mortgage in this case?
I don’t own a property myself so I am a little concerned about whether I am eligible to take on a buy-to-let. I realise we could sell the property but part of me is keen to keep it running as it generates some good income.
Answer
I am so sorry to hear about your mum, I am sure this is a very difficult time for you.
When the property goes through probate, you will have the option to sell the property, and these proceeds will then be used to pay off the mortgage, with the balance to come to you.
Or, you can raise your own mortgage to repay the existing debt and take over running the property yourself. It sounds complicated, but the practicalities of this are quite straightforward.
In terms of your eligibility, broadly speaking, lenders will want you to own your own home and have an income. I would urge you to speak to a mortgage broker who will be able to run through your situation and advise on the most appropriate lender.
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