Does this sound feasable?

Tr1gger

I currently own a 2 bed flat which i bought little over a year ago for £94k, i put down £20k on this so have a mortgage of £73k. The girlfreind has now moved in with me and the place isnt big enough now. I dont want to sell the flat as i've made a lot of improvements, spending £1000's on it, so if possible would like to rent this property out, as i recon i could get around £450-£500 a month for it.

What i would like to do is take out around 10% of the next property purchase price, so say £13000 to £15000 out of the current flat so that i can put a deposit down on the next house, which i'll take out a joint repayment mortgage with my my girlfiend on, but switch my flat mortgage payments to interest only so that my monthly payments are low and easily cover the rent i'm getting in. I'm not after making any profit from the flat, just want to let it tick along in the background with the interest being paid on the mortgage hopefully gradually increasing in value so that when the market recovers i can make a profit if i decide to sell, and the little profit i do make, if any will be poured back into the flat on maintenance, CP12's etc

Does this all sound feasible?

beecher

I would've thought your LTV would be far too high to take out £13-£15,000 out of the current flat as doing so would surely push you into negative equity. In fact I wouldn't be suprised if the lender wanted you to pay off more of your mortgage to lower you LTV before agreeing to this, rather than allow you to increase it.

Am confused as to why a 2 bed flat isn't big enough for 2 people.

Tr1gger

beecher wrote: »

Am confused as to why a 2 bed flat isn't big enough for 2 people.

I get my daughter staying 3 nights a week!

I get a reasonable salary of £37k and the girlfriend around £16k, so we bring in approx £3300 each month?

beecher

You need to phone up your lender and see what they think your LTV is at the moment, and whether they'd allow you to do what you propose. Your salary doesn't really come in to it - you need to know if you're close to negative equity at the moment.

maninthestreet

Tr1gger wrote: »

I get my daughter staying 3 nights a week!

I get a reasonable salary of £37k and the girlfriend around £16k, so we bring in approx £3300 each month?

So you and your GF sleep in one bedroom, and your daughter sleeps in the other. Your salaries/income are irrelevant if your lender considers the LTV to be too high.

jawster

As you have such a decent income, surely you could put away half your salary in savings for just 6 months and you will have saved £10k?! This is probably the quickest way to get your deposit.

Jacka87

I am also confused as to why the 2 bedroom flat is not big enough. However can you not raise the deposit for an alternative property in any other ways such as savings?

Also have some lenders allow you to change a mortgage to buy to let but some do not and this will need to be checked. If this is the case then you could change the mortgage to such a mortgage and take out the joint mortgage for the second property if not then the whole idea will fail.