Do you think I can buy this house?

Danjames90

Hi

A quick question I would like to run past people as I am keen to here your advice.

My situation.

I am looking to buy the house I live in currently, at present I rent it for £800 a month. The house is up for sale for £260,000.

I earn £29,000 a year my partners earns £21,000 a year as a teacher. We have a child under three.

I have no debt, a small amount of savings and a reasonably good credit history. I also own 2 buy to let properties and have estimated there is about 35 to 45k worth of equity in them.

A mortgage of this size would no doubt cost me in excess of £1,500 a month as a repayment mortgage, i understand that.

What I am trying to do is not sell the two buy to let properties I have worked so hard to buy but use them as equity for this property. Do you think any lender would even entertain this idea?

What would your advice be?

Thanks.

ET1976

Why would you want to pay all that interest on a mortgage when you are only paying £800/month to live in the house at the moment?

The only way I would entertain doing it would be to sell the BTLs and put the resulting equity down as a deposit.

Cannon_Fodder

Lenders will probably want to leave the equity in the BTLs, as they've changed maximum LTV criteria since the credit crunch.

You might get around £200k on 4x joint salary. So even if they let you have £20k of the equity out of the BTLs, it won't be enough.

Keep saving, or sell one BTL.

When_is_the_reset?

I think the days of doing this are gone - Thank goodness.

Leveraging up small incomes to build a property empire and denying others is soooo 2006.

Just keep renting!

sciencegeek

why not continue renting at 800pm and save the other 700pm you are not using to service your mortgage debt. Soon enough you will have saved a much larger deposit.

I think trying to buy a 260k house on a combined income of ~50k is crazy.

Danjames90

When_is_the_reset? wrote: »

I think the days of doing this are gone - Thank goodness.

Leveraging up small incomes to build a property empire and denying others is soooo 2006.

Just keep renting!

I am not really trying to deny others as such but I guess obviously I am by default. I worked so hard for those houses that I am keen to keep them really, that is all.

Danjames90

sciencegeek wrote: »

why not continue renting at 800pm and save the other 700pm you are not using to service your mortgage debt. Soon enough you will have saved a much larger deposit.

I think trying to buy a 260k house on a combined income of ~50k is crazy.

Saving up the 700 a month is a good idea but I just wanted to buy now and pay that 700 towards the mortgage as while I am saving up the property is rising in value more than my savings, if that makes sense.

It is something we have talked about.

When_is_the_reset?

Danjames90 wrote: »

I am not really trying to deny others as such but I guess obviously I am by default. I worked so hard for those houses that I am keen to keep them really, that is all.

Selling them now may turn out to be the best thing you could ever do.

I am not sure what you mean by working hard - did you build them with your own hands? Borrowing the money was not so hard before but it is getting harder.

Boozer

Danjames90 wrote: »

property is rising in value more than my savings, if that makes sense.

.

I think you will struggle to get a mortgage of that size with the income you have, also you obviously think house prices are only going up, what would happen if they come down, then not only may you lose on the house you buy but also the amount of equity in your others goes down also.

Fire_Fox

Danjames90 wrote: »

I am not really trying to deny others as such but I guess obviously I am by default. I worked so hard for those houses that I am keen to keep them really, that is all.

Three mortgages is a heck of a risk - what will you do if you get made redundant, partner falls pregnant unexpectedly, you become ill or injured and cannot work, one or both of your tenants stops paying the rent or trashes a BTL?

getmore4less

What gross yield are you getting on your BTL? (on purchase costs including any refurb since)

What mortgage rates did you get on them.

your landlord is getting 3.7% that smacks of cheap rent of peak price

Why is he selling?