rental aerrers and remortage application

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    rental aerrers and remortage application

    Out of 4 property I have, one of the tenant is not able to pay rent on one property

    I can arrange to Evict the tenant, but the fear the tenant might stop paying the rent all together till the court issues the order.

    I have a re-mortgage coming up in Dec2020, Will this affect the remortgage applicaton/decision?
    This is considering the property under remortgage consideration is not the one the tenant is unable to pay


    #2
    WHY do you plan to remortgage Dec2020?? Valuations will probably have dropped, what's wrong with (I'm guessing...) you staying with existing lender on his variable rate please?

    Someone not paying may or may not affect application, but I'd bet a lot of money that different lenders have different rules...
    I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

    Comment


      #3
      As you have four properties it is normal practice for a lender to not only want a detailed schedule of the properties but also seek the last three months bank statements to show detailed receipts of individual rental payments , if these are paid via a Managing Agent they will then seeking the respective monthly rental statements plus evidence of the mortgage payments having been paid.
      I am assuming that December is the date your current borrowings come out of the ERC’s so the alternative if needed is to establish whether it is more cost effective to pay the last years ERC and take up a new mortgage facility .

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        #4
        the penalty to exit is very high 6K.
        3 Properties are BTLs, the mortgage payment is regular.
        The 4th is where I live.
        The only problem is one of the BTL tenant is turning hostile and stopped payment.
        Will this affect the remortgage application/decision?

        Comment


          #5
          As long as the remaining properties are currently generating adequate rental income to meet the total mortgage liabilities of all three properties this should in theory not be a problem but remember that the lender will use an aggregate rental stress calculations at a higher rate to ensure that they are well covered , this being in addition to the individual rental assessment for the subject property and your personal rate of tax , so if you are indeed a higher rate tax payer this might be up to 145% at a notional rate of 5/5.5% unless you are electing to take a 5 year Fixed rate where the RoI can be slightly more accommodating.

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