Get a mortgage and secure against other house for better deal?

Showboat

Hi all, i appreciate that i can only get some guidance, but it would certainly help to get some opinions available before i go looking like an idiot to a mortgage adviser!

I currently own outright with no mortgage a house with a valuation 150-200k, and a buy to let property with 70k owed and value of about 130k.

I would like to buy another house that needs some work done to it, the seller does not want anyone in a chain, simply because nothing is selling and they need the money.

My wife and i have a combined income of 70k, and we have about 50k savings in cash ready to use to do the repairs / upgrades to the house.

I would however like the best deal when getting a mortgage and also keep as much of my 50k as possible to do work to the house without needing to get a loan.

Would i need to put down 10%-25% to get the best deal, or can i use my current home as a guarantee that they can repo both if we ever defer / can't pay.

Thoughts on this are that we only put down 15k for mortgage and use the other 35k to do the work, we then move into that house and rent out our current home for 3-5+ years and house prices recover slightly prior to selling it.

Thoughts / opinions please

Conrad

25% down for best deals

If b2l then 25% needed really

If residential then you can in theory get about 90% but the rates will be higher

You cannot really put up your existing home as security unless you raise a mortgage against it.

The cheapest way would likely be a full remortgage of your current home up to 75%.

herbiesjp

What is the purchase price of the new property?

If you are going to move into it - then remortgage your current main residence on a BTL basis and then get any mortgage required on the new place if needed.

This way the debt (or at least most of the debt) is not on the property you are going to live in, but on the rented one.

Thrugelmir

What is the cost of the house that you are looking to purchase?

Showboat

Apologies for slow reply, the house i was looking to purchase is 150k

herbiesjp

You could in theory raise the mortgage against the unencumbered property, and with the funds you have, buy the new property outright.

Whether or not this can happen in reality, will depend on the finer details of your scenario and meeting lender criteria.