Raise money or get a new mortgage?

T&M's_mum

Wondering if anyone out there can give me any helpful advice?

Currently own a house worth £155000 and mortgage of £26000.
We need to move to another area and rent out this property. We have tenants waiting to move in and we will get rent of £500 per month.

Currently have a flexi mortgage with rate of 5.25%.

Looking at buying another house with value of about £115000.
I earn approx £10000 and partner earns £20000 with £8k o/time. no other loans etc but have £2000 on ccards (0%).

Should i look into raising money on my existing house or look at getting a seperate mortgage? Don't know which lenders to look at as we will not have a track record for the rental income of current property.

Any suggestions greatly appreciated!!!

UK007BullDog

My suggestion is to see an indenpendant mortgage broker!

They will do the math for you and show you what your best options are.

I think there is scope in your present property to release some equity, but you should first dig out your old mortgage docs and take them along to the broker to see if you have any early repayment charges.

The released equity will help pay towards the new house unless of course you have some sort of savings to put towards the new house then I would not touch the old property and just let it run.

But only a broker with all the facts can answer your qustions and pull proper quotes for you.

HTH

regularsaver1

if you keep your existing mortgage on a rediential basis and just ask for permission to let (you will need to do this, they may change your existing rate, charge you a fee, & if you plan to raise somew money restrict you)- and then take the new mortgage on a residential basis too -
you will probabaly need to show affordability of both mortgages. not all lenders will take rental income into consideration - your broker should point you in the right direction