Buying another house, options with old house???

mark_j

Hi

Myself and my fiance are intending to buy a larger house.
Our current house is 6 years old, it is worth around 130-135K, we owe 90k mortgage of which we are no longer tied up, as the mortgage was fixed for 5 years and has finished.

Our current house is a 2 bed newish build mid terrace, going by all the same houses on our estate easily rented for around 575pcm minus letting agent fees

The larger house we are interested in is 140k, we have around 40k of savings

We would like to rent out our current home with a buy to let mortgage and take out a new mortgage between us for the larger house.

Im 27 and earn 40k, fiance is 25 and earns 20k

What is our best options? I have been doing some research, and i know there is alot of knowledgeable people on here aswell.

Thanks Mark

Mickyfinn

You could enquire about consent to let on the existing property saving you having to change the mortgage product? It could be a cheaper route.

mark_j

Mickyfinn wrote: »

You could enquire about consent to let on the existing property saving you having to change the mortgage product? It could be a cheaper route.

Thanks, i didnt realise you could do this, Our existing mortgage is with the co op, we have 6 years of history with them, never missed a payment and have been overpaying each month, i suppose my first port of call will be to ring them, it might be easier and cheaper for us to continue with them but on the larger house we want, and then see if we can get a decent deal on a buy to let mortgage for our existing house.

I have been looking for info on other websites, but what would you say is the current best deals on buy to let mortgages???

Thanks Mark

getmore4less

Whats the current mortgage rate?

£575pm on £130k is 5.3% gross yield

With costs your net yield wll be much lower and with a mortgage at 70% of the value you will be lucky to break even if rates go up or you get voids or a bad tennent.

Make sure the numbers stack up and check out what becoming a landlord means.

the new place £40k on £140k is 71.4%LTV what about costs and emergency cash(needed with 2 properties) you might not have the decent LTV meaning a more expensive new mortgage.

Trollfever

Bear in mind that BTL is a business venture with all the associated risks/rewards.

mark_j

Hi

Thanks for all the replies

How are you working the gross yield out?? Would it not be 575pm on a 90k buy to let mortgage?? 7.6 gross yield??

And out of interest what should we be able to realistically borrow for our own mortgage going on our earnings??

Thanks

Thrugelmir

mark_j wrote: »

How are you working the gross yield out?? Would it not be 575pm on a 90k buy to let mortgage?? 7.6 gross yield??

You also have equity in the property , which under your calculation is not making any return.

By owning 2 houses your fortune would be very much tied to the property market. Do you have investments in ISA's and Pension schemes as well?

You have sizable savings does this earn more or less interest than you are currently paying on your mortgage?