I own, mortgage free but looking at a 2nd property to live in

justwondering25

I'm mortgage free but want to buy another property

my house value 120k (in which I currently reside)
spare cash 40-50k
low income currenty under 10k (company director)


I've seen a property for 100k that I'd like to buy , what would the best way to buy ( type of mortgage and best deals to consider )based on my circumstances above ?

I was thinking of taking mortgage against my house for say 60k , then adding the spare cash and buying the other property outright .

then letting out my first proprty and moving into the other property!

is this the best way round ?!

or should I find a suitable mortgage for the 2nd property use my spare cash as a deposit ? then rent out my first house ?

I assume situation two would be better ? as I would be free to do with my first property as I please ?

the only thing that concerens me is my current low income or could I suggust that I could rent my place at say 550-600 per month and quote this as part of my income ? etc

how much should I be ideally earning for a 50-60k mortgage ? or is my deposit of a suitable size for my income to be less important ?!

advice welcome please !!

VIGILANT22

[QUOTE

advice welcome please !![/QUOTE]

1.When renting a property, the recommended rental income is a figure the surveyor submits to the lender on the valuation report. You can charge what you like...(within reason).....however the lender's criteria is likely to look for rental income to be 125/130% of mortgage payments (Interest only)

2.BTL mortgages are available up to 75% LTV

3.Bringing what was yr residence into the business (btl is business/investment)...you can release equity for deposit on new home and claim tax relief on both properties...

http://www.hmrc.gov.uk/MANUALS/BIMMANUAL/bim45700.htm

4. Pls note on the forum it is opinion and not advice....your situation may be a little more complex because of status (company director)....therefore see a whole of market for advice...

herbiesjp

Is the £10k your total income? Or do you have retained profits, and or dividends?

As you are looking at letting out your current property, look at raising the funds on property 1 on a BTL basis, and then buy property 2 with those funds and your savings.

Whilst some lender require a minimum income for BTL some others do not.