Buy to let or Residential mortgage

[want2findout]

I have a house which is worth �90k. Mortgage outstanding is �43k. My 2 years fixed rate has just ended so I'm looking to remortgage for �50k asap (additional �7k needed to pay off some debts).

I recently moved in with my partner and we are looking to rent my house out, with the rental income of �450 covering mortgage repayments, insurance, letting agent fees, tax and repairs.

Trouble is, do I go for a buy to let mortgage now or try for a residential and then inform them at a later date that I would like to let the property? I have just tried this with my current mortgage provider (not mentioning the fact that I may be looking to let the property) and my application was declined as since taking out the mortgage with them I have started my own business therefore income a lot less than previously. Obviously my salary will increase as the business expands but at the moment I am putting everything back in to the company. I am basically earning �600 a month including dividends (Limited company). I can see where the mortgage companies are coming from as 4 x my salary does not make �50K. I know I can afford the monthly repayments, now I need to find a mortgage!

Any advice much appreciated.

Many Thanks

[EverClean]

A buy to let mortgage will usually be worked out on the rental income rather than your personal income and can in some circumstances be taken out in the name of your limited company if this benefits you. Seek advice from a mortgage broker.

[want2findout]

The property is nothing to do with the company which is why I can't understand all the questions from the mortgage companies. As soon as you mention you are a company director they want to know company turnover etc. Surely, as a company director I am employed by the company as anyone else would be employed? the company is nothing to do with my personal income and personal mortgage?

Anyway, I have tried the residential mortgage approach and that does not work based on my income of �600 a month. This will only allow my to borrow �28k at the most.

Do you think I should go back to my current mortgage provider, mention that I am looking to let the property. They should then take in to account the rental income in addition to my income?

Or should I go down the route of self certification? I do not fully understand what is involved here?

Buy to let mortgages I believe offer a higher interest?

I never thought it would be this difficult to remortgage and borrow an additional �7k. At the end of the day the property is worth at least �90k, I am only looking to borrow �50k.

Any advice?

Thanks

[EverClean]

If you own 20% or more of a company then just about all mortgage lenders will see you as self-employed, hence the questions about the company.
Buy to Let rates are more than resedential rates but the gap is quite narrow now. The Buy to Let would be offered on rental income, getting past the need for verification of your income.
Taking out a resedential mortgage when you are letting it out is fraudulent, although if you keep up your monthly payments then I can't see a mortgage lender that will take you to task on this.
Self-certification entails you stating an income that you have but may not necessarily be able to prove. It is not an opportunity to lie about your income.
My best advice is to see a mortgage adviser - they are experts who know the market and can advise you which course of action to follow.