remortgage/second home???

jacks_mummy

Hi there,

Can anyone explain in very simple terms regarding keeping our home at the moment, renting it out and buying a second home. i have trawled through lots of sites and cant make head nor tail!!! This is the question I would love an answer too!!!

We have made about 90,000 on our current house, we would like to keep it and rent out as rental in our area is in demand. We would get around £500 rent minus letting charges which is about £100 clear of our mortgage.
We have a mortgage of 69,000 and would like to purchase a house around the 190,000 mark. I cant seem to work out how much our mortgage repayments would then be on the new house??? I know rates are different so trying to work it out on an average rate over 25 years?!!! If we used collateral from our home would that make our mortgage on our first home more therefore we may not cover mortgage if we let?
Is there any hidden costs that we would have to pay if we have one house letting out and one on a mortgage?

Or can anyone reccommend a good site that works out mortgage repayments (as all the ones i found dont account for my circumstances!!)or gives free advice over the net?

Sorry if I have confused anyone!!! Think I am confusing myself!!

happybroker

Do you have a deposit to put down on the new house? If so how much do you have?

herbiesjp

Letting out your property: You would either get consent to let from your current provider, or change this property to BTL if they do not give consent to let.

The rental income would need to cover the mortgage payment - different lenders have different amounts of mortgage coverage.

If you can satisfy the the above requirements with a lender, your new purchase is classed as a Let To Buy.

The property in the background will be ignored, and your full incomes will be used when looking at getting a mortgage amount agreed.

LTB rates are not any higher than standard rates.

The rate on offer will depend on the deposit/purchase price.

You just need to make sure the lender you approach is OK with the LTB scenario before they do any credit checks.

jacks_mummy

thanks for replies, we dont have a deposit to put down for new house, is it possible to use money that has been made on ours? but then will that put up the repayments on existing mortgage?

herbiesjp

In that case you are likely to have to change to a BTL.

However the rental income then needs to support the new higher mortgage amount.

Sounds like you would benefit from professional advice - get in contact with a whole of market mortgage adviser, and they will look at the whole scenario to see if the figures stack up or not.