Mortgage advise needed!!

COHUBS

We are looking for some advise on our current situation, we are living in a 2 bed flat which we purchased last feb for £190k (20k deposit) - we have totally modernised and now looking to put on the market at a loss!!! Estate agent think we could get £175 - £190k so think we need to look @ worse case and base all sums on 175K.

we would like to explore two possibilities:

1) Selling our flat - If we sell for 175k that would give us approx 10k cash to invest, we are looking to upgrade to a 3 bed and both incomes add up to £85k. What would be our min deposit needed on say a 250k house?

2) Transfer our current mortgage on to a buy to let (dont really understand how it all works), would this be a possibility? Then we would like to purchase a 3 bed as above for 250k, could we use the flat as a deposit or would we have to raise money?

We are asking because we need to work out our options before seeing a broker and marketing our property but as this is only our potential second mortgage i have to say its all a little confussing

Thanks in advance

Ian_Griffiths_Halifax

With a mortgage of £170k on a £190k purchase and an expected sale price of £175k, this only give you £5k to invest unless you have paid a significant amount off your mortgage in the last 2 years. Then you have Estate Agents fees (expect around 1.5% of the sale price + VAT), Stamp Duty on your purchase at 1% of the purchase price and Legal fees for Sale and Purchase, expect around £1200-1500.

On your purchase, you would need a minimum £25k deposit and certainly more than this ie £50k to get anything like a decent interest rate.

You can't use the flat as a deposit if you turn it into a Buy to Let, and if you did turn the flat into a Buy to Let, then you'd need to pay something off the mortgage as lenders are looking at only around a 75% Loan to Value Ratio.

See a broker anyway and he'll be able to show you your options.