Can anyone give advice??

Tiddler_2

durbanamanda wrote: »

hi
we have mortgages on both properties. 1 has a £70k mortgage and i get £550 a month rent for it (its a buy to let mortgage). the family home has £90k mortgage on it and we reckon rent could be £500 per month.

re balance to complete purchase - seller is forgoing the deposit as he needs to sell house urgently, so the savings we have is for things like stamp duty, etc

the £70k income is what is declared to the tax man

So are you saying that the seller is letting you buy a house worth £405k for £270k? Is the seller a relative at all?

Conrad

There are a couple 0f 90% options. Im not clear where your deposit is comming from. If it's a sale under 'true realisable' value, there are lenders that will consider the equity as deposit.

Its quite a complex case that needs care and attention. As an example some lenders might want your current residental mortgage lenders written permission for you to let.

An experienced careful, non salesman broker should be able to assist. Watch out as most brokers prime goal is to sell you insirance.

getmore4less

£405k->£290k , it's not worth £405 then is it,

To the bank it will look like you are asking for 100% mortgage of £290k which is what you say you are going to pay.

As for your rental proposal.

House 1. £70k mortgage rent £550, Gross Yield 9.4%

House 2. £90k mortgage rent £500, Gross yield 6.6%

From post one,
we have anywhere between £180k and £250k equity in our current 2 homes (very conservative figures)

Together with the equity,the low figure(180+90+70) thats £340k generating rent of £1050

Gross yield 3.7% this is lower than the morgage rate so you need prices to go up to make money so you are subsidising these places.

If you are still conservative at the £250k equity, thats gross yield of 2.6% not a very good return on your money and thats before any costs of running 2 rentals or voids in rent, dependng on how the equity is split the current rental might be viable and does have the margin to raise some funds but not much, the current house is allready mortgaged to a level where it will not make sense to release any funds.

Overall don't look that good to me especialy if you don't want to be landlords. depnding on the value of the two places I would be selling one or both to fund the new place.