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A family member has been offered a job which comes with a house as part of the package (farming) and he is thinking of renting out his current house. He has recently taken a 3.9 5yr fix with RBS (60% LTV) and has asked me whether he can do so and keep the deal he has got with RBS. Mortgage approx £435 (repayment), rental £525 approx (will need to be £544 for 125% cover if forced to go BTL).
I am aware that some lenders are OK with this kind of thing, some require an extra %age, some switch you to BTL terms and some do not entertain it at all. Not sure of ERP fees but likely to be 3-5% at least. Do any of you have any experience of this with RBS? Additionally is there anything he should not say when he phones them up? I am not suggesting for one minute that he should lie but I would not want him to say something unnecessary and blow his chances.
Any advice would be much appreciated.
Lisa All comments are for education and information purposes only and do not construe as advice or a financial promotion. No liability is accepted for comments made. If you wish to receive information in an advisory capacity then please contact me about becoming a client. www.keys-mortgages.com
Thank you for the swift reply.
I did say to him that each case is looked at on its own merits. As you say he has got a very strong case and it is genuine, he has been looking for a job that allows him to be at home more as he got married last year and first baby is on the way. He has had the house for just over 3yrs and was intending to stay there long term. Marriage and baby on way have changed his outlook (he has married a country girl that loves horses) so the tied house will be ideal for them. They have not seen the house yet and if his wife does not like the place (unlikely I think) they would stay put.
One issue may be the drop in salary but he can not do anything about that, quality of life is more important to him now. He does not want to sell so he will just have to see what they say. 5yrs would be a good starting point that is for sure.
Yes all fixed now. Not running yet but off walking along the Amalfi Coast for 10 days on Sat so that will be a good test for my pelvis.
Hi Steve in all honesty impossible to say as each lender will treat each case differently.He's got a low LTV, on a repayment and got a very good reason for doing so so I'd say his chances are high.The downside is if he's just took out the deal they may suspect he's done it to deliberately get a good rate on a rental but conversely just getting tied back into a deal is a good reason to let it rather than sell.The common thing is to put a time limit on it; in this case likely as long as his fix lasts then he'll have to sell or move back in but see what they say.I wouldn't say anything else than what you've told us; genuine good reasons IMHO.Lisahttps://www.keys-mortgages.comPS Are you well and fully fixed now?!
I had already told him to make the call as a "what if" but I did not mention that in my post so thank you for taking the time to make that point.
Steve Rosemarie said:
Should he ask hypothetically as a caution? i.e. he is thinking of applying for a job away rather than suggesting he has already decided and asking what they think..