Remortgage For A 2nd Home To Rent

DINOKIDS

Hi I'm looking for some advice from anyone who can help ......

My husband and I want to buy a 2nd property on a remortgage of our own home. It is our intention to rent out the 2nd house and get the mortgage paid. Even if we can't rent it out we can afford the mortgage repayments ourselves.

We can't afford the 15% deposit and buy-to-let mortgage rates.

1) Do we need permission from the mortgage lender to use the remortgage for a buy-to-let?

2) Can we offset the interest we are going to pay against the buy-to-let?

Thank you for any advice !!!:beer:

Ian_W

You might be better posting on the mortgage & endowments thread above this one although a lot of the brokers who post there also post here. To try and answer your questions:
1. The lender will want to know the purpose of the additional funds but buying another property will almost always AFAIK be acceptable to them.
2. Offset against what? You can claim it as an allowable expense for tax purposes when declaring the rental income of the property to HMRC. However if you don't make a profit from renting a BTL the loss can't be offset against your other taxable earnings - but it can be carried forward against future profits.

The figures on BTL don't add up ATM to me at present. High prices coupled with moderate rents and an over-supply of potential BTL in many areas mean poor short to medium term returns for new BTLers in those areas. Research your market - sure house prices rise in the longer term but ....

sanfrancisco

DINOKIDS wrote:

We can't afford the 15% deposit and buy-to-let mortgage rates.

This should give you a clue as to what to do. Sometimes Banks have limits and rules for a reason and they are there to protect us.

Jim_B_3

Why do you want another house?

realwildone

We can't afford the 15% deposit and buy-to-let mortgage rates.

If you can't afford this you shouldn't be doing it. You may well be risking your financial security

realwildone

You may also like to read the other thread 'Why can i not get on the property ladder' as it is people like you that are stopping these youngsters from getting on the ladder.

But as long as you are alright eh?

lynzpower

realwildone- give the OP a break. It also said in that thread, its a free market, and lets face it OP can do whatever they want with thier own money as long as its legal

Lets try and be nice to moneysavers shall we

Jorgan_2

OP, if you can afford the repayments on a second property without it being rented, why not put this money towards paying off your own mortgage quicker? It will give you better financial security in the long run.

Buy to let isn't the easy way to making money that many believe, see the numerous threads on here, both for & against.

Do your research, speak to a whole of market broker, research some more, then decide.

Jim_B_3

Seems quite a gamble, remortgaging your house to buy another one. A downturn in the market and some bad luck and you could lose both.

realwildone

realwildone- give the OP a break. It also said in that thread, its a free market, and lets face it OP can do whatever they want with thier own money as long as its legal

Lets try and be nice to moneysavers shall we

I have a lot of time for your posts. However it's not always about being nice. It's about being true. Friends of my childrens cannot get on the ladder because of greedy people like this. Buying your own home is one thing, stealing someone elses is another. I have no time for these greedy people, trying to make money on the backs of other peoples misery. I hope it all goes wrong for them.

Jorgan_2

realwildone wrote:

I have a lot of time for your posts. However it's not always about being nice. It's about being true. Friends of my childrens cannot get on the ladder because of greedy people like this. Buying your own home is one thing, stealing someone elses is another. I have no time for these greedy people, trying to make money on the backs of other peoples misery. I hope it all goes wrong for them.

Its a free market, nobody is stealing anything from anybody. Buy to let may be partially responsible for increasing property prices, but low interest rates and the increase in the number of people getting divorced also are partially responsible.

Just because the OP is looking for an investment doesn't make them greedy, would you say the same if they had posted about buying stocks or shares?