Possible to Own 2 Homes?

oblivion_6

Hi guys,

Let me tell you my predicament and see what you think.

Recently we decided we need to get out of our 1 bed flat and get something bigger as its been holding us back from starting a family. My wife and I moved into it 5 years ago and paid £82,000 for it, now after that time the mortgage remaining is £73,000 (we got 100% mortgage at the start), now thanks to a lot of luck and company shareschemes we have mounted up a good bit of savings and thought we would try and buy another place and get our place either rented or sold.

Because of the market I thought renting would be better for a year and then try and sell after that, so I have valuations done and was given a figure of £450 a month which more than covers the mortgage.

So we went and saw a perfect house that we got a great deal on and bought it for £128,000 which is about 5k under the home report valuation and is in a superb location, its just slightly dated but liveable.

Right so now Im in the situation of waiting for consent to let from my current flat with Scottish Widows, I had to fill in a financial form which showed that my wife and I had about £4k income after tax monthly with about 2.5k going out (in the worst case that the flat doesnt get a tenant). But Ive also now got a mortgage in principle from Abbey, they have asked for the rental predicted income and Ive sent this off with all our information and am waiting for an outcome.

My question is this, in the worst case if I dont get consent to rent and I then have my old property, am I allowed to buy my new property seen as I dont need any equity to cover it? in theory we have nearly 20% of the new home available but only putting down 10% as the rest will probs do it up a bit.

I would probably drop the mortgage to interest only and then be forced into trying to sell it for say5-6 months but I dont know if the bank im getting the new mortgage on will let me do this?

Sorry for the long rant, my wife is panicking that we lose our new house on this one

Any advice is much appreciated

oblivion_6

Worried now that after a good few views and no comments this is a really really rare thing?!?!?!

jamesperrett

Only Abbey can tell you whether they are happy to lend to you. In principle you can own as many homes as you like provided you can afford the mortgages on them.

James.

welshy_2002

I don't see the problem really..

If you do not get consent to let, you may as well sell the first place no?.. using the equity as a partial deposit on the second place..

You've already mentioned you have 20% for the deposit anyway, whether you want to use 10% of it or not (leavin the remainder to do-up the place)

So worse case senario then.... you have to sell property 1 and have to use a bit more of your saved cash to bump up the deposit for property 2. I agree your better off renting the first place out, until the market gets a bit more stable, but if you lose a bit on selling, it's not the end of the world, as your moving to property 2 and that's the important thing right? starting a family

Good luck

oblivion_6

Hmmm thanks guys, hopefully Scottish Widows will get back today with a result, my main concern is that Abbey wont let me get the other mortgage but then again seen as they offered us a mortgage for 250k on top of the 73k mortgage we already have then maybe they are ok with it?

Who knows, its stressful this malarky

Doozergirl

Ifyou can get a mortgage for £250k then in theory, with the combined values being less than if you have enough equity and savings, you could own both without one being a BTL. Scot Wids will have a LTV at which they will give you consent to let so even if you aren't at it now,you could potentially feed money into it.

It seriously would have been easier just to sell the flat. No one knows what next year's market looks like.

oblivion_6

Doozergirl wrote: »

It seriously would have been easier just to sell the flat. No one knows what next year's market looks like.

Aye i know but Im put off by the way the market around us is going, flat down the street sold for 75K, now fair enough its a lot smaller and needs a fair bit of work and no GCH but still.

I would rather just rent it out (if i can) and see if I can handle it for a few years and then sell whenever I think I can make the most cash out it.

Fire_Fox

If you want to let the flat you are going to need consent to lease, you are not supposed to have two residential mortgages. You also need to check your long lease to see if you need permission of the freeholder, factor in income tax and capital gains tax, to inform your buildings insurer/ get landlord's insurance, consider how you are going to pay TWO mortgages plus council tax during vacancies, what you will do if the tenants don't pay or trash the place ...

Bear in mind Doozergirl is an experienced property developer, I'd be inclined to take her advice.

oblivion_6

cheers m8

Ive got a rental agency ready to sort out all the certificates and things that I need, and once the consent is granted I will get that all under way.

What I did may seem rash but the house we bought was a steal, got it at about 10k under home report and the houses on that street of same structure recently went from 20k more than what we paid so it was just too good to pass up.

Still no word from mortgage company but ive got a prospective buyer coming up early next week to have a look as theyve been looking for a while and we just got talking through my solicitor so fingers crossed.