Is buy to let an option?

sfell

Hello all

Any advice is appreciated!

We currently live in a very rentable flat in Manchester. We are looking to move as I have to travel 50 minutes each day to work and also want to buy a family home.

Unfortunatley as with many other our house is only worth £110,000 when we paid £115,000 so it doesn't seem viable to sell it.

We have been saving and will have £20,000 for a deposit for our new house. We are now wondering if we'd qualify for buy to let morgage to keep the flay and buy a house? Would we have to take out a buy to let mortgage and would anyone give us a buy to let and another mortgage anyway?

We earn £76,000 between us and don't have any debts or loans.

I think I already know the answer (that we'll have to wait another year), does any one have any advice? Do you think it is worth a visit to a FA?

Thank you all in advance!

Leon_W

There is no equity in your flat and waiting another year isn't going to solve that problem, so the only viable option is to sell it I'm afraid.

northerner999

If you want to keep your original property, why don't you make some overpayments to reduce your debt and interest payments? Seems daft to have £20K in savings when you're in negative equity and (hopefully) secure income. Your original mortgage will be taken into account for any second mortgage anywya.

olias

Am I missing something? How do we know the OP is in negative equity or has no equity in their current home when they haven't said what their current mortgage is? For all we know they may only have a tiny mortgage on their current place - they have only stated that it's worth less than they paid. Can the OP clarify.

With combined income of £76000 and £20000 for a deposit, they should easily be able to furnish sufficient loan to purchase a secong similar priced home provided they have enough equity in their current place.

Olias

sfell

Thank you all for your replies, we still have £101,000 mortgage to on our flat, so no equity. But we do make overpayments of 20%.

If we put it on the market, we will have to sell for less than £110,000 (We paid £115,000). We have been saving for 2 years for a deposit on a new home. Is your suggestion that we should pay this off our current mortgage?

Do you have to have a buy to let mortgage if you rent your home out and don't live there anymore?

I am trying to decide what is better for us both financially and personally!:mad:

Kind regards!

herbiesjp

You can ask for consent to let from your current provider.

getmore4less

Have a review of your expenses and priorities if a new house ss he goal.

OK 50 miles to work costs a bit

£76k is £4200pm-£4600pm take home

I would be saving a lot more than £1kpm(£20k in 2 years) with a £100k mortgage.(7% over 20y is <£800pm)

Probably closer to £2kpm without extreme budgeting but thats us you can do your own review.


Back to your house whats the likely rental? No point in turning it into a BTL even with consent to let if you lose money.

northerner999

Negative was a slip of the tongue (or should I say finger?), what I meant to write was little equity.

longwalks1

what herbiesjp said about consent to let, but tihnk theres a limit on time you can let for, some lenders its a year, some lenders dont allow it at all (much to my disappointment with First Direct)