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Rental property

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24 May 12 #332665 by k2k2
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I own a rental property which was purchased using equity in the FMH. As part of the divorce agreement I have to clear the debt on the FMH. I have been searching for BTL mortgages but am being told I cannot use a BTL mortgage to clear debt on the FMH then transfer it to a rental property.

Can anyone give me any further advise on this or see a way around it? I don''t see why I can''t get a BTL mortgage since it will be secured against a rental property even though the funds will be used to clear the debt from the FMH.

Many thanks.

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24 May 12 #332669 by cookie2
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I am a bit confused here. You own a rental property which was purchased with funds from the FMH? Can you explain, how did you release the equity from the FMH and how much? And how did you purchase the rental property - how much deposit and how much mortgage? What is the current value and mortgage amount of both properties? And what do you want to do now?

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24 May 12 #332671 by k2k2
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Hi

When I was married I used equity in the marital home to buy another property which I now rent out. This was to avoid a BTL mortgage at the time. I simply took out a second mortgage on the marital home and used the money to by the rental property. I don''t recall exact figures but I need about £95k to clear the debt and am trying to do this by getting a BTL on the rental property but using the funds to pay off the debt on the marital home.

As part of a divorce settlement I have to give my stbx the FMH and it has to be debt free.

Thanks

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24 May 12 #332679 by cookie2
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Right OK, hmm think you need to speak to a mortgage lender or financial advisor about this. It''s not really a divorce matter.

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24 May 12 #332681 by k2k2
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Hi

I have an appointment with a mortgage advisor. Just wondered if anyone had been in a similar situation. If I can''t do this then the case will go to court and probably result in the rental property being sold which in turn means I have to evict my 78y.o. tennant under terms of the AST which is what I am trying to avoid.

Thanks

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24 May 12 #332683 by cookie2
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Yes, I guess if your legal obligation is to pay off the mortgage on the FMH then you must do that no matter what it takes. If you can''t find a solution or lender who allow you to keep the rental then I guess it''ll have to be sold.

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