Forum Replies Created
Refixing (remortgaging), is not easy but some brokers specialise in mortgages for expats. The only back-door way to remortgage is to do a ‘product transfer’ at the end of the fixed period. This can only be with the same lender and only switches you to the lenders variable rate which is much higher (as far as I’m aware). I understand that few questions are asked and little proof is required to make this happen. Everyone I’ve spoken to here has little interest in overseas income to support loan applications in the UK and, in my experience, it appears to raise more negative questions about serviceability than to bolster your credit rating.
Thanks mate that is very helpful.
By product transfer do you mean convert from home loan to lower lvr buy to let loan? At this point would you need to contribute hard equity to bring LVR back to buy to let levels or do the banks lets you keep lvr as is?
Most BTL loans i’ve seen are around 50% compared to home loans of c.85%. This would be a very big equity hit you’d need to inject to do the product transfer – assuming valuations don’t rise.
I understand lenders give consent to rent temporarily and add 1% on existing interest rate. But what happens if I want to keep my loan in place for the whole 30 years. Can the consent to rent last the whole 30 years?
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This reply was modified 6 years, 6 months ago by
propertyboy. -
This reply was modified 6 years, 6 months ago by propertyboy.
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This reply was modified 6 years, 6 months ago by propertyboy.
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This reply was modified 6 years, 6 months ago by propertyboy.
So say I buy a flat and I get 2 years fixed. Then after year 2 I decide I want move back to Australia.
Can the bank reject consent to let? If they do can I refinance into a lower LVR buy to let mortgage?
If they don’t give me consent, I will need to refinance the loan into a buy to let loan on a much lower LVR. Will I be forced to sell at this point as I can’t convert it to a Buy to let loan because banks wont touch non uk income to refinance my product into a BTL loan?
Pretty shit lending environment it appears for overseas investors. Once you get a loan in aus, no consents needed for investment loans with most lenders
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This reply was modified 6 years, 6 months ago by propertyboy.
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This reply was modified 6 years, 6 months ago by propertyboy.
The water, gas and electricity show usage but I always had my mail sent to a PO Box. THe bills were in my name and I paid for the usage however.
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This reply was modified 6 years, 6 months ago by propertyboy.
Ok guys, just read the terms and conditions in detail.
If you are on a Home Loan product, turns out you need consent from your lender to rent it out (big 4 bank). They cant unreasonably withold providing such consent. I have moved back into my PPOR but may need to move out again on sort notice. So I have decided to keep the mortgage as Investment to avoid hassles in the future with consents etc – not worth the interest I could save to convert
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This reply was modified 6 years, 7 months ago by propertyboy.
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This reply was modified 6 years, 7 months ago by propertyboy.
I was looking for evidence to prove I was living as my main residence at point 4 because if I can’t prove this I would potentialy have a big cgt liability as my 6 years will be hit now
4. Then lived in it for 6 months from April 2013 to October 2013
I have found gas, electricity, water and internet bills in my name. Is this sufficient?
I had the address at my POBOX address but the bills were in my name. Is this going to cause me problems?
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This reply was modified 6 years, 7 months ago by propertyboy.
Terry thanks so much for the link – it was very helpful
Is there a minimum period you have to move back in for the 6 years to be reset.
In my situation.
1. I purchased a house in Nov 2009
2. Lived in it for 18 months to April 2011
3. Rented it out for another 2 years to April 2013
4. Then lived in it for 6 months from April 2013 to October 2013
5. Has now been rented ever since October 2013.
Does my 6 years run through to October 2019 now? Or is the 6 month period I moved back in at step 4 not enough for it to reset?
I have not owned any other houses so no other PPOR throughout this whole period
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This reply was modified 6 years, 7 months ago by propertyboy.
Are you sure the 6 year period can be reset?
If you read the example of Rami, it appears you only get 6 years in total. Not unlimit d 6 year intervals on the basis you move back in within 6 years.
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This reply was modified 6 years, 7 months ago by propertyboy.
So you saying banks have existing default clauses requiring you to pay back the loan if your financial situation changes post loan funding even if you are meeting interest payments? Or for resi loans once the moneys lent as long as interest it paid its all fine even if the borrowers financial situation changes
I know commercial loans have quarterly interest coverage covenants etc but I can’t see monitoring clauses in big 4 funded loans
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This reply was modified 6 years, 7 months ago by propertyboy.
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This reply was modified 6 years, 7 months ago by propertyboy.
“Had Bic moved back in before 01 Jan 2010 and then later moved out again, he would not have paid any CGT tax. He didn’t do this because he didn’t want the hassle of having to move.”
Say Bic moved back in before 1 Jan 2010 then moved back out again on 1 Jan 2012 is he CGT exempt?
Wouldn’t he have to pay tax on 2/8th of the gain?
I thought you only get 6 years in total as exemption? Or is it 6 year intervals based on the last time you lived in the house.
Reason I ask is because:
1. I purchased a house in Nov 2009
2. Lived in it for 18 months to April 2011
3. Rented it out for another 2 years to April 2013
4. Then lived in it for 6 months from April 2013 to October 2013
5. Has now been rented ever since October 2013.
Does that mean if I move back in by October 2019 and sell it I will be CGT exempt? Eventhough in this scenario in total I have rented it out for more than 6 years but my final interval is less than 6 years if I sell before October 2019.
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This reply was modified 6 years, 7 months ago by propertyboy.
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This reply was modified 6 years, 7 months ago by propertyboy.
What will they be tracking though? As I can’t see where I would be in breach of the standard loan terms. I just read the standard terms and conditions and I can’t seem to find anywhere that states consent to rent is required for a home loan. Maybe they have overlooked this as the terms and conditions were set before the differential in rates were set for investment and home loan products.
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This reply was modified 6 years, 8 months ago by propertyboy.
I can’t seem to find any wording in the common NAB home loan terms and conditions that outline a home loan products prohibits the temporary leasing of the property or any requirement that it has to be converted to an investment product.
Out of interest, what is stopping all new applications applying for a home loan and then renting flats out after their loan has been funded? Do lenders do any checks? Or is this a common trick lending managers are now adopting to reduce interest rates for clients?
I know in the UK if you don’t convert the loan to a Buy to let (investment loan) you will be in breach of the home loan and insurance policy, effectively meaning your property will not be insured as you will be in breach of the insurance cover.But, I don’t insure the unit as the body corporate insures all the 6 units under the one building and common building cover and Public Indemnity.I know another two units are currently tenanted so I don’t think I will be in breach of the insurance cover as the insurance cover effectively captures both investment and owner occupied risk.
My only issue is, if I decide to refinance later down the track converting it to a home loan may impact my ability to get a larger loan as I will not be able to rely on the rental income. I am willing to take this sacrifice.
Are there any tax implications I am missing? I don’t negatively gear on this property so having it as an investment property doesn’t really impact me anyway.
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This reply was modified 6 years, 8 months ago by propertyboy.
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This reply was modified 6 years, 8 months ago by propertyboy.
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This reply was modified 6 years, 6 months ago by
