Let to Buy Self Cert
Want To Buy Your Dream Home? But Have Not Sold Your Existing One?
How do people do it?
When we first spoke with John he wanted to sell his existing family home and buy a new home and needed a Self Certification Mortgage as he is self employed and had insufficient audited accounts.
We spoke about his options and decided that getting a decision in principle would be the best way forward as this would give him peace of mind knowing that a lender has agreed to lend him funds for the new purchase - it also put him in a stronger negotiating stance with the estate agents as they knew that he was a serious buyer with pre approved funds.
The decision in principle was agreed without problems within minutes so all John had to do was sell his current property and find another. John then called the office stating that he had sold his and was now out actively looking for a new home for him and his family, a few weeks passed and numerous telephone calls between us when John then informed us that he had now found a new property and was ready to proceed. We upgraded his self cert decision in principle into a full self certification mortgage application.
Then the troubles began...
Everything was going smoothly, surveys had been done and we were only awaiting the legal side of things to catch up as mortgage offers had been produced. We then received a call from John and he told us that the intended purchaser's of his property had pulled out do to unforeseen circumstances and he was in turmoil as he did not want to lose the property that he was purchasing.
How was John going to get a deposit for the new purchase when he had intended to use the sales proceeds to fund the new purchase?
We suggested to him that he could change his requirements from a residential purchase to a 'let to buy' as long as his current property would achieve the required rental income that a new mortgage lender would require. In essence, what this means is that we restructured the initial finance on his current family home and converted this into a buy to let mortgage. When we re structured this mortgage we also raised additional capital so that John could use this to fund the deposit needed on the new purchase.
The new lender, for John's intended self cert purchase would not classify the existing house as a commitment as it would be viewed as an investment property with the new tenants paying the cost of the mortgage. In other words, the new lender would be happy that John could afford the new and the existing mortgage (as it was being paid by some other person)
The rental income on the existing property was enough for John to take up this option and we structured his mortgages accordingly.
In Summary:
John had to complete on two mortgages with us. The first was a buy to let remortgage of his existing home with additional funds being raised at the same time, and the other, known as a let to buy, was a new self certification mortgage for the new family home. The surveys were carried out on both properties and subsequent mortgage offers were received and John was able to complete on both mortgages to ensure that he didn't lose his dream home.
