Mortgage question - let my home and buy new one

mr_mortgage_2

Hello, can anyone please advise.

I am looking to buy a new property and rent my existing one out. I currently have no mortgage on my home. Am I able to take out a "normal" mortgage on my current home to release the equity, as opposed to having to take a buy to let or let to buy mortgage? I need to also take a mortgage out on my new property. Effectively, can I have 2 "normal" mortgages - one being my main residence and the other rented out until prices come back up?

koexelek

You need to do a buy to let mortgage on the house you currently own, then a normal residential mortgage on the new house you are going to live in.

Make sure that the lender on the property you are going to live in is happy that you are going to have a buy to let mortgage as well though.
Some lenders will happily do both, but others will insist that both are supported by your earned income alone.

Most will be OK if the rent covers the mortgage interest on the buy to let though

mr_mortgage_2

thanks for your reply.Is this the case even if my salary multiples cover the value of both mortgages?Don't want to do a buy to let as the rates aren't as good.I just want to wait for prices to come back up a bit, so I can then sell my current home.

neverdespairgirl

If you are living in one house and renting out a second house, you need a buy-to-let mortgage.

Why not sell the first house and buy the second? Then you aren't doubly exposed to falling prices.

envelopes

When we bought this house, like you we owned a home that we lived in, so we remortaged the house we was living in first just enough to cover part of the deposit for this. We then changed that mortgage to a BTL so that we could have a residential mortage on this. This house needed extensive renovation for the first 5 months and so we lived in the BTL property - not sure that was strictly legal. WE had a choice to either continue renting that house or sell and I am so pleased now that we did sell at that time.

There was no way that we could have two residential mortgages in joint names so I am pretty sure that one would need to be a BTL but, the best thing to do is to get some firm advice from someone who knows - we did loads of shifting money about and it was quite complex because we actually changed three mortgages at the same time because one of them had been a residential mortgage in my name so that had to be changed also to a BTL BUT also speak to your mortgage lender because my original lender for the property that i had in my sole name was happy for me to rent it out on their residential mortgage - a financial advisor will know all the ins and outs - things change and regulations change so it may be different now.

Good luck with your new venture!

koexelek

mr_mortgage wrote: »

thanks for your reply.Is this the case even if my salary multiples cover the value of both mortgages?Don't want to do a buy to let as the rates aren't as good.I just want to wait for prices to come back up a bit, so I can then sell my current home.

If your income covers both, you can do two ordinary residentials.

The problem you might have though, is insuring the property you are not living in. If you don't let it, a lot of insurance companies won't be happy about it being left unoccupied ( if this is the case)