best way to raise a deposit, advice please!

msmucker

Hi,

wanting to move house and I am finding our situation getting complicated and would really appreciate some advice please.

currently live in a property valued £80 - £85k and our mortgage is only £35k. Want to rent out current home and buy another larger house which is £85k (needs work)

we will need to put a 15% deposit down on next house, we only have around £2k savings so not enough for a 15% deposit.

We have been to see a mortgage advisor and he has recommended a btl mortgage on house we live in currently to raise the deposit. However, we have a really good mortgage deal and will have to pay redemption fees if we do this.

Can anyone offer any advice please as £13k doesn't seem such a huge amount of money to raise when we have so much equity tied up in our current home. We both have good credit and are employed (not massive earners tho!)

Is it possible to take out a bank loan for example??...

Any advice much appreciated

Raggs_2

Loans aren't accepted as deposits. The only way I can see you doing it is to take another 12k on top of your mortgage, whilst converting it to BTL. Then you have to hope you still qualify on affordability fronts.

Why not just sell the place you currently have? Use some of the money as a deposit, and the rest to do the place up?

You have to look at worst case scenarios, would you be able to afford to pay both mortgages, and repairs+maintenance on both properties?

On a more strict financial side, would you be able to get over 330 pounds a month rent for your current place? This is 5% of the investment (80k value of the house), only you don't get all of that, since you'll have landlords insurance to pay, a higher mortgage rate, covering periods when you have no tenants, repairs and maintenance, certificates etc. If you can get a lot more than 330 a month, then it might be more worthwhile, if not, there are safer, and easier investments.