Need Advice for 3rd Mortgage

Big_Z_2

Hi,

Me and my wife both work full time and our household income is around £72000. We have a residential home with mortgage of £239000 and the property was valued at £285000 by bank last month.

I have another Buy to let property with £232000 mortgage and property value approximately £275000.

As my family has grown i need a bigger house now. So i am thinking to rent out my residential property and buy a new house. I am looking to buy the new property within the range of £320000-£330000. I am willing to pay 10% deposit from my savings for the new house.

Both of my current properties are in London and within walking distance of City. I rent out the property by myself as individual room to city professionals. So i get very good return approximately £2400 from my rented property. I am quite sure that if i rent out my residential property i will receive similar kind of return. I have already spoken to my lender and there shouldn't be any problem to change the mortgage from residential to buy to let.

Now my question is when i'll ask for my 3rd mortgage, will any lender be able to provide me mortgage for £290000 for my new home? Will they think it's too much risk as i have got two other mortgages? How should i proceed from here? If necessary we can move with my parents for few months and rent out my current home to provide proof of rental income.

Any help will be appreciated.

Thanks

minimike2

The other mortgages shouldnt be a problem to any lenders as long as they are buy to let and self funding. Make sure you have the relevant HMO license if required and fator in any changes you would need to make to the property to bring it up to the required standard.

At just over 4x your income, assuming no other loans / credit cards, the £290k mortgage shouldnt be a problem for mainstream lednders like Halifax / C&G / Abbey / Woolwich / Nationwide etc.

Remember to factor in stamp duty and legal / moving costs too.

A broker will definately add value here, so someone whole of market would be a good first stop.


Cue the masses of posts saying "OMG DONT BUY A HOUSE NOW YOU MUST BE STUPID" etc etc.

Treadmill

minimike2 wrote: »

Cue the masses of posts saying "OMG DONT BUY A HOUSE NOW YOU MUST BE STUPID" etc etc.

Yup, cue the folks that have had their lives on hold since 2002 lol

Joe_B_5

That really sums up a lot of the the issues you will face.

It's worth noting however that the new purchase at 90% loan to value is going to be at the expensive end of the mainstream market. If you could somehow increase your deposit you could reduce the rate you will pay, which at that level of borrowing could make a significant difference on your monthly payments.

Definitely worth talking to mortgage advisor here as an even slightly beeter rate could be of a great benefit.

I am in a similar position to you with several BTL properties and I've found my broker invaluable. Give them a try, see what you think - Worldwide financial planning - you'll find them on a google search, they're completely independent and offer really good advice.