Renting my house and using equity to buy

ecclesto

Thanks for all your help! Am going to seriously look into all this

new_home_owner_3

ecclesto wrote: »

Don't know about landlords and yields!
Reason behind move is transfer of work and nearer to son. Hope house prices will rise in the next few years and as long as not out of pocket can keep the 2 houses on! Would be a nice nest egg as well.

Just think if you buy anther house with a 85000 pound mortgage on and the house you have been renting out goes from 180 to 280,000 you could sell and have a nice little nest egg of 110,000 pounds.

Im not sayIng they will go up instantly but history tells us house prices usually double every 10 years, i paid 70,000 for mine in 1999 and in 2009 its was valued by the mortgage company at 150000, the estat eagents valued at 169,000:eek:

new_home_owner_3

Sammy85 wrote: »

A rent of £750 and interest payments of £325 leaves £425 of taxable income each month. Having a larger mortgage on the rental house will reduce tax liability on the rental income.

I also dont think you'll find many lenders who will give you a residential mortgage if you tell them you'll be moving on and will want a consent to let.

They did it for me and he wont be much of a risk has both mortgages will be 50% or more ltv, so not much of a risk from the lender.

It used to be common practice people used to get consent to let a week after, things have tightened up, but with the other persons figure i dont think he will get any issues.

The good thing with this even after tax the mortgages will be both getting paid from the rental preoperty and he can just sit back and wactch the house prices grow.

brit1234

new_home_owner wrote: »

Im not sayIng they will go up instantly but history tells us house prices usually double every 10 years, i paid 70,000 for mine in 1999 and in 2009 its was valued by the mortgage company at 150000, the estat eagents valued at 169,000:eek:

Thats not true, thats false buy to let spin talk. Your property only went up that much because it got caught in the biggest housing bubble in history which is set to deflate.

Everyone knows homes maintained sustainably go up with inflation unless you add value.

What value have you added to stop you home plumeting in price as rates go up?

ecclesto

Can I just clarify I am a she! I am getting confused here though. I own my own home now (well almost) and will be renting this one out but buying one in my new location. I won't be renting my new one out so why "buy to let"?

Ditch_Crawler

ecclesto wrote: »

Can I just clarify I am a she! I am getting confused here though. I own my own home now (well almost) and will be renting this one out but buying one in my new location. I won't be renting my new one out so why "buy to let"?

You said you wanted to release the equity in your existing house. But, yes, if you pay off the 5grand so you own the existing house outright, then rent it out, you will have the rental income to add to your 17grand salary when you applly for a new residential mortgage on your new house. You will need a deposit, though.

DC

Sammy85_2

If you take a mortgage on your old house and rent that out then you need a buy to let mortgage.

Your new house can be a standard mortgage.

Nosht

Just remember that house prices can go DOWN as well as up although not forever.

N.

kittycatsam

We've just arranged a BTL mortgage on our house to raise a deposit for a new property which we will also take out a seperate residential mortgage for.

The criteria for the BTL was that you could borrow 60 - 75% of the property value depending on the lender and that you needed proof of expected rental income (letter from a letting agent) to show that the rent return would be 125% or more of the mortgage payments.

There were some other terms and conditions relating to the residential mortgage lender and how they treat the rental mortgage and income but a mortgage advisor would be able to sort this out for you. It was all actually quite simple after we didn't know if it was even possible to do this.

ecclesto

Been to see an advisor tonight and know a little more about it now. Spookily, someone at work might want to rent my house for 2 years so I won't need to use a letting agent. If an EA has told me to expect between £700 and £750 per cal month, how much can I realistically expect to get, bit wary as they might tell me an inflated figure just to get my business.