Mortgage Query

marty1888

I bought a House with my Partner about 2 years ago for £90k.
We paid an initial deposit on the house of £8000 in order to bring down the mortage costs.

The house is now Valued at £130k.

Basicaly I wanted to know if its possible to remortgage for that amount (or pretty to close to it) in order to take on a "buy to let" property in a well known Manchester Student area where the Rental Income is virtually guaranteed.

Thanks.

Marty

herbiesjp

As long as you are at 85% or under in terms of mortgage value against property value then the answer is yes - bearing in mind that the rental income would need to be of a sufficient level to support the loan.

Also remeber that not all BTL companies like student lets so be careful who you approach.

marty1888

herbiesjp wrote:

As long as you are at 85% or under in terms of mortgage value against property value .

sorry, can you give me that in Laymans terms please?

Thanks

YorkshireBoy

marty1888 wrote:

sorry, can you give me that in Laymans terms please?

Thanks

I think 'herbiesjp' may have thought you were going to a BTL lender for a separate stand-alone mortgage, in which case they would like you to have at least a 15% deposit - thereby meaning you will only require a maximum 85% loan to value (LTV) mortgage. BTL lenders also like to see rental income of 130% of the mortage repayments, to cover for void periods etc.

However, it's possible he thought your current lender would only let you remortgage for 85% of your current property value.

Just to clarify, if it's the second of the possiblities above, you have around £50K (£130K - £80K approx. mortgage balance?) of equity in your current property? If so, then you may be able to release around £30,500 [(£130K*85%)-£80K] toward your rental property.

All this assumes your salary(ies) will support the additional borrowing of course.

marty1888

Thanks Very much for that Info.

Joint Income is around £45k so I would imagine we would be able to support the additional borrowing.