Buy to Let - 2nd property

thenecroscope

Hi all,

I'm new to the site so please go easy on me!

I need some help with regards to purchasing a 2nd property. I currently own a house/mortgage with my brother which is split 50/50. The value of the property has increased by 100k.

I currently do not live in this house but my brother and his wife do. I'm still paying the mortgage and have moved back to my parents. I would like to ideally purchase a new flat with my girlfriend. I'm currently thinking the best way of doing this is to use the 50k that the property has gained and use it as Equity Relase and to get a Buy to Let mortgage. I will then pay 50/50 of the costs and she will effectively be the tenant with me. I'm thinking it better to keep property rather than sell it?

If for any reason my girlfriend and I do not work out it will be easier for us to go our seperate ways.

Or the alternative is to sell the first house to my brother and get a lump sum?

I'm completely stuck, I'm not really sure what to do!?????

thanks in advance!!!

CloudCuckooLand

BTL mortgage interest rates are higher and need a 25% deposit, so £50k would limit your purchasing power to £200k, which might not be enough in some locations.

Do you have a written/verbal agreement with your brother as to how things would be treated in the event of one of you needing to get out of the situation? You should stick to that, if you have one.

If his salary supports taking over your half, then him remortgaing to buy you out would be the least hassle for everyone. If his salary doesn't, then at some point he needs to get something that he can afford with his wife, as your current joint arrangement creates a financial link which can impact your individual position.

Better imo to split the profit with your brother. Then you have more, and cheaper, options as a residential mortgage can be obtained with a 10% deposit, increasing your purchasing power to upto £500k...

You can keep it in your own name until you and the girlfriend are ready to go joint.

poppy10_2

You can't get a BTL mortgage on a flat with the intention of living there yourself, even if you sublet to your girlfriend. Better to to get a residential mortgage as tenants in common with your girlfriend,.