How does Buy to let work?

Steve_Pawley

I have a house that is now worth £100k more than when i bought it, what i would like to do is, rent this house out & purchase another one to live in. Do I use a buy to let mortgage or just get another mortgage using the income of the rent to help fund the mortgage?

the_blue_angel

not to sure

HGLTsuperstar

Do you own your current home outright, or is it mortgaged?

nmiah786

Steve_Pawley wrote:

I have a house that is now worth £100k more than when i bought it, what i would like to do is, rent this house out & purchase another one to live in. Do I use a buy to let mortgage or just get another mortgage using the income of the rent to help fund the mortgage?

Is your current house mortgage free or do you still have a mortgage on it, if so how much?

You could remortgage your current house for upto 85% provided the rental income would cover 130% of the mortgage payment. Effectively turning your current house into a BTL mortgage.

Then using the equity that you have released from your current house, you could put it down as deposit on your new house and get a normal residential mortgage. Provided your income supports the repayments.

Thats my interpretation but I'm sure someone more knowledgable will answer it more in depth.

HTH

Steve_Pawley

Thanks,

I owe 65k on my current house.

inmypocketnottheirs

The best thing is to get the highest mortgage possible on the property you wish to let, then the inmteresrt on that mortgage is tax deductible. So always best to borrow as highly as possible on the let property.