Help/advice with a second morgage.

lucyjane81

Hi, I have my own property with a morgage of £120k it has been valued at £170K, my boyfriends is in a similar position with about £30k tied up in his.

We are planning on renting both these properties out and getting a new morgage for a third property for us to live in. I have called a couple of banks (where bother our morgages are) who have said that i need 15% deposit... I would rather not have to take collateral out of either propert to make sure the rent I can get covers the morgage.

Does anyone know where i can start lookng into this. Or if this is even possible to do.

Thank you everyone x:j

Cannon_Fodder

Not without a deposit.

You rightly need to leave equity in the other places, as once temporary consent-to-let runs out (assuming the lender grants it) you will at some point need to convert those rentals into official buy-to-lets...which will need 25% equity, rent equal to 125% of the mortgage, a higher interest rate, and a £?k setup fee.

Sell, pocket the £80k-ish equity, and that'll be a great 25%+ deposit, making the rate for the new place much less painful. Even if you scrapped together 15%, the rate wouldn't be the most attractive.

Why have 3x maintenance costs to worry about, if the rent is so borderline you have to leave equity alone to be sure of covering the mortgage at a time of historically low interest rates ? When rates rise, as they will, your maintenance costs are not going to reduce.