Mortgage restrictions

[Grampa]

I have just found out that TMW which normally offer some of the most competitive BTL rates have a restriction against also owning the property next door. Which is a bit of a bugger as I have a house converted into 2 flats and own both. Aldermore which is the current (shortly ending) lender new rate is a eye watering 7.9%.

Has anyone come across this restriction before?

mmmmmm. I wonder if "next door" also means "above"

[Richlist]

No, I've never come across that before. I owned 2 flats that were literally next door to each other, they even had sequential door numbers. The mortgages were originally both with Paragon I think & then both re mortgaged with West Bromwich Mortgage Co Ltd. It was never raised as an issue, don't recall it being part of the t&c's.......both sold now. Is it worth you talking to a mortgage broker ? I've always found that they can find mortgage offers that aren't generally available elsewhere.

[Grampa]

1 hour ago, Richlist said:

. Is it worth you talking to a mortgage broker ? I've always found that they can find mortgage offers that aren't generally available elsewhere.

Its early days yet as the mortgages don't run out until May but that's the next plan to talk to a broker. But the big question is do I wait until closer to May to renew or tie in something earlier about Feb  which will then be held until May?

[fionaf]

I know a friend who tried to take out insurance on a flat in a conversion and asked for a recommendation from someone else in the block. The insurance company wouldn’t insure  her due to exposure of risk, if the whole building blew up they would be exposed financially. Similar with flooding risk etc. I wonder if a mortgage risk is similarly exposed to risk like an insurance company would be? I am surprised it is in their T&Cs though as normally It is on a case by case basis. 

[Richlist]

I suspect the reason (or part of the reason) is to do with repossession. If the lender needed to repossess one of the flats, the unhappy borrower could, if they wished, create numerous problems for the lender when they tried to sell the property. Noise, water leaks, parking problems, general bad behaviour et c that might impact their ability to recover the debt. 

[Melboy]

3 hours ago, Richlist said:

I suspect the reason (or part of the reason) is to do with repossession. If the lender needed to repossess one of the flats, the unhappy borrower could, if they wished, create numerous problems for the lender when they tried to sell the property. Noise, water leaks, parking problems, general bad behaviour et c that might impact their ability to recover the debt. 

This happened to a property I purchased way back in the 1990's. Everything had been stripped out and sold off. Central heating boiler and underfloor copper pipes, hot water cylinder, kitchen, bathroom, doors the whole lot. Saved me a lot of clearance work though and I got the property at a dead cheap price.

              It was then I found out that mortgage debt can be reclaimed for up to 12 years and not the usual 7 years for outstanding mortgage debts. I bet the person who did this wasn't aware of the debt repayment time. Probably still paying it off.  😃

[Grampa]

Well managed to get half decent rate with NatWest on the top floor flat which I have recently refurbed and has a healthy  EPC rating of C. However, they wouldn't touch the lower flat as it had a EPC of E and I cant get it higher without kicking out the tenant due to the works required so having to renew that one with Aldermore but luckily there is only a mortgage of 68k on it so plan to pay about 25% off before the new rate starts to help mitigate  the high rate.