Mortgage & Equity

GH0250

Hi, would i be able to do this
The property i currently own is worth 170k....i owe the bank a mortgage of £28,000

i am looking to buy another property for 185k i have a deposit of £37,000 with which is 20% LTV

What i would like to do is re-mortgage ? release equity? from house i currently own of roughly another £37,000 and put down £74,000 for the house i want to buy which will bring the LTV down to 60% and get me a better deal.... is this possible

GH0250

please can someone advice me on this

Cannon_Fodder

In theory, yes. A re-mortgage could get you the extra £37k. Whether some lenders might have issues over the reason you would put as the purpose of the additional borrowing, I don't know.

You would need an income that supports, in the Lender's view, two mortgages (£28k+£37k and £111k) totalling £176k, i.e. approx £40k.

Owning a second home has tax issues you might wish to read up on.

Depending on the occupation of the second home, there may also be insurance issues.

GH0250

Cannon_Fodder wrote: »

In theory, yes. A re-mortgage could get you the extra £37k. Whether some lenders might have issues over the reason you would put as the purpose of the additional borrowing, I don't know.

You would need an income that supports, in the Lender's view, two mortgages (£28k+£37k and £111k) totalling £176k, i.e. approx £40k.

Owning a second home has tax issues you might wish to read up on.

Depending on the occupation of the second home, there may also be insurance issues.

the house i currently own is let out and on a BTL mortgage and i get monthly rental of £600pcm out of that i pay £250 mortgage a month leaving me with £350

the second house is on residential mortgage, i am already in process of purchasing it but with only £37,000 deposit i cannot get a good deal on the mortgage...... and was looking at raising some cash out of the current 1st house and using it to get a better deal on the mortgage 60% LTV

my income is 25k a year

thanx

getmore4less

£600pm on £170k 4.2% gross. a bit on the low side.

Take the tax/costs off the rent and you are lower probably around savings rates. Tax is probably around £50-£80.

What rate is your BTL and what term.

What was the place worth when you first started letting it(this is limit of borrowing you can go to for tax relief).

With £25k income you are looking at £100k max so need more out of the BTL that £37k

Talk to the BTL lender and see what they would go to.

Is this new one to live in?

Looking at a BTL max limits say 6%, 75% ltv rent cover 125% of interest

Your £600 gets you £480 @ 6% thats £96k + £37k leaves £52k.

So theres is somewhere in the middle of what you think you want and what you might be able to get that will satify a new lender if the BTL lender will release enough.