Buy to let mortgages advise needed.

wannaberich41

Hi,
I am in the process of putting my house on the market, but have just found the ideal house. It ticks every box of our list of requirements. As we have been looking on rightmove everyday for the last year, this is the only one thats perfect for us. But as i have said we are only now putting ours on. Then the estate agent mentioned about a buy to let mortgage. (not heard of these before)
Can anyone advise if this is a good or bad idea? Or offer any advise?
Our mortgage is currently is 41k so quite small. Our current house is valued at £155k. The property that we would really like is on the market for £159950. (which in our opinion it is under valued). We really don't want to miss out on this. Ive looked on rental sites and think we could get £600 a month our current home.

Any advise would be very much apprecaited.

herbiesjp

Do you have funds readily available for the deposit on the new purchase?

Or would they have to come from the sale proceeds/equity of your current property?

wannaberich41

Would i still need a large deposit then? I dont think i would have one big enough. Is that the only way?

antrobus

You'd really need to speak to someone higher up the food chain than an estate agent. If you've got a £110k equity in an existing property, you might be able to buy another property for £160k without putting down much if any of a cash deposit. There was a time when you could do that sort of thing without any trouble, whether that is still the case I don't know. You need to speak to your favourite lender or contact a mortgage broker.

P.S. Remember that the £600 monthly rental is likely to be gross. Managing agents will charge at least 10% plus VAT, there's repairs, insurance etc

herbiesjp

Well you need at least 10% deposit - if you want the better rates then you will need something like 25%

Don't forget other costs like stamp duty etc.

Sounds like you will need to change property1 to a Buy to let and raise funds on that by increasing the mortgage.

You had better speak to a good broker who can walk you through the criteria of both the re-mortgage and purchase.

GMS

You see to be looking at a 'Let to Buy' scenario.

You would rent your existing property out and at the same time release equity for a deposit on a new property with a residential mortgage being arranged for the purchase.

It may be possible depending upon your circumstances.

A good 'Whole of Market' broker should be your first port of call