I'd like to get a buy to let on my recently deceased Mum's house.
There is an equity release policy attached to the house and I need pay half the remaining equity to my brother. So I need to raise £70k on a £113k house.
I don't think I'll have a problem getting a mortgage as it's affordable and I've a good credit history.
I'm looking for a good deal and some advice about who holds the deeds and how I get them etc.
As far as affordability goes, a buy to let lender will be more concerned with the rental income - there will be a calculation based on this to assess what they will lend.
I'd suggest you use the 'Find a Local Financial Adviser' tool on this site to find a mortgage adviser who can help you.
Regarding the deeds, they will be with the equity release provider and will probably be transferred to the new buy to let lender. Your solicitor will handle that for you.
Hope that helps,
David | 11.17.11 @ 09:52
David is correct, in the main, although there are a number of schemes available which would use your income to determine how much you could borrow on a BTL basis. It depends what the realistic rental income would be. Every lender uses its own calculation to work out how much they would lend, so there is no quick and fast rule.
As for the deeds, the mortgage deeds will be held by the mortgage company (or equity release provider), whereas the property deeds will usually be held at the land registry.
Although this would seem a straightfrward transaction (and it is), some lenders do not like to get involved in probate transactions, particularly where the purchaser (you) is putting no money into the deal. That being said, there are plenty lenders that can still help, but it is essetial that you obtain expert, and independent mortgage advice.
As David suggested, do a seach on this site for a local mortgage broker, or alternatively go to cherryfind.co.uk
I hope this all helps, at, what must be, a very difficult time.
pks.org.uk | 11.17.11 @ 10:38
i agree with the above comments but if it helps initially, you would need a rental income yield of about 7.5% and this would cover the vast majority of lenders. it would equate to about £437pm which i would expect is more than achieveable in most parts of the country.
unless if the probate process has already completed, you will be unlikely to be able to do anything until an executor has been confirmed (or personal representative). the probate process is used to validate the existence of a will and confirms the appointment of the person/people appointed to deal with the estate.
i wouldnt under any circumstances pass over this role in full to a solicitor as their fees might be excessive but you might choose to use their services where it saves you time or you dont have the knowledge.
this is not to say that you shouldnt be prepared to pay for the right service but as with many professions, there are some that would charge £50+ per letter sent out just to confirm things like account balances, closing procedures etc and these are certainly tasks that most people can handle but then let the solicitor deal with their area of speciality - the legal process.
the equity release lender will normally give up to 12 months grace on the loan from the date your mother died before they could enforce the sale of the property so you will need to be prepared to act swiftly as the probate process can sometimes be long and drawn out.
you should be able to take advantage of remortgage deals for the buy to let loan which will help to limit your initial costs and there are a variety of buy to let lender exclusives and incentives available at the moment (assisted legal and valuation costs etc).
on the assumption that the equity release mortgage is recent deal, within the last few years, all property deeds have been "dematerialised" this was basically land registry converting old paper documents into electronic records. so you will no longer need to worry about finding the actual deed, as its a computer record. you might find the old deeds (the wax sealed documents) somewhere in your mothers possessions as they would have been returned to her when the last mortgage was repaid or when the equiy release deal was taken out.
i'd be happy to help you out further but of course none of us know which part of the country you are in, i'm in the south so might not be local and you might prefer to deal with a local person?
feel free to get in touch if you need any further clarification.
you wont be | 11.19.11 @ 15:16