How much do we need to save up?

shamac

We have recently self-built and have a mortgage of £152k on a house valued recentlyat £325k but probably realistically worth £300k in present climate.

House next door is a holiday let-almost identical to ours-which lets at £500-£700 per week approx 20 weeks a year. We want to change our residential mortgage to a buy-to-let or what is appropriate for a holiday let and use our house as a holiday let business.

We have the use of a flat for a while (belongs to family member) where we can live for 12 months or so.

We want another mortgage to buy a house for us.

Figures are Hubbie brings in £4k after tax monthly and I work part-time making £300-£500 a month. We are both 41 and have 2 young children.
We have a car loan of £384 a month until 2011 but no other debt on cards or anything and perfect credit history. We spent all our savings on self-building so need to start again.

My questions are how much would the banks lend us and how much deposit would we need as a deposit-ie how much do we need to save up whilst living in the flat. Can you also recommend a company which deals in mortgages for holiday lets.

thanks
Sharon

shamac

Just bumping this-can any of the mortgage advisors help us?

herbiesjp

Well for the holiday let scenario - choices are limited as normal BTL lenders will not be suitable.

For the new purchae you will need at least a 10% deposit to start getting towards any lower rates - the bigger deposit you have the better.

What is hubbies gross annual salary?

shamac

Gross salary £65k

herbiesjp

Well you could be looking at a maxmimum of somewhere between 4 and 5 times your joint income as a mortgage amount

The car loan would reduce the "assessable" income by £4608

And because there are four of you, this will impact on the affordability calculators of some lenders as well.

What kind of property prices were you looking at?

I'd suggest discussing in details with a whole of market adviser, to see how they could best work the scenario for you, based on exactly what you are looking for.

shamac

We were looking to spend about £180k on our new house.

herbiesjp

Should be fine at that level with the right deposit

I'd still run it past an adviser, to make sure the holiday let in the background will be ignored by whichever lender you look to go for on the new purchase

shamac

Do you think they would want to see that the holiday let income would cover our mortgage on it? Future bookings maybe?

herbiesjp

Yes - that could be one aspect that will be looked at by the new lender