Double Mortgage: How does this work?

boy_3

I am a newbie here and FTB as well. But, I have gone through most of the details that Martin has provided and have read through the posts as well.
I have a question if somebody can guide me.

I have just seen two properties: around 150K each. I would like to buy both. I can afford a mortgage of 300K based on my earnings. I have around 50K cash for deposit as well. Is it possible to take out two mortgages at the same time to fund the buying of these 2 properties? Or can I do a single mortgage against 2 properties? How does this work? Any suggestions appreciated.

Thanks in advance!

homer_j_3

What are your intentions for the properties? Live in one, rent one out or live in both or rent both out? If we know what your aspirations are, then we will have a starting point.

Mortgages are loans secured against property so you will be limited to a % of the property value. Therefore it would be fair for me to say that you would be looking to have 2 mortgages on 2 properties. What mortgages and the best options will all come down to your aspirations.

boy_3

Thanks for your time Homer (I know I always liked him ). My intention is to live in one and rent out the other one. I can distribute my 50K cash in those 2 properties. So, I am going to need mortgages of around 80-85% of the property value. Is it going to be one FTB mortgage and one BTL? Or can I just take a single FTB mortgage (around 250K) against these properties?

herbiesjp

You will be looking at 2 separate mortgages on2 seperate properties - one would be a residnetial and the other a BTL.

What kind of rental income would the BTL property give you?

boy_3

650-750£ rent for either one

silvercar

I've just exchanged on two properties at the same time. A residential mortgage is lined up for one and a BTL mortgage for the other. You usually need a deposit of at least 15% for the BTL and rental to exceed mortgage payments by at least 25%. You should be able to get a residential mortgage at a lower rate than the BTL.

You can get tax relief on all the purchase price of the BTL even if some of the mortgage is secured on your own home.