second home

ds2010

hi everyone,

i'll try and keep it simple and easy.

I have a house approx. value £220,000.
Left to pay on current woolwich mortgage approx. £44,000 - 17.5 years.
Age 35
Salary approx. £41,000 inc bonuses etc
cash savings £22,000
no debts, bad history, or ccj's etc - all clean.
potential rent if let out £850-£900 p/m

The plan:
to buy house for £300,000, move in and rent out current place.

any advice on if its possible please and any implications and types of mortgages

need to put in an offer asap.

cheers
d:money:

diable

You may have to declare the tax on the rental income, transfer the original mortgage to BTL raise a new mortgage in these hard (ha ha) times and have to deal with the joys of renting out a property. Also work out the % returns on your investment.

Thrugelmir

You'll need a minimum of £30,000 in cash to fund the deposit on the new property plus legal costs and stamp duty.

However, your £41,000 salary won't support a £270k mortgage. No where near in fact.

So then you'll have to remortgage your existing property for £100k or so. Which starts to defeat the objective of renting it out.

The major downside if you do go ahead is that you'll have £500k exposed to the whims of the residential property market. So a 15% fall would result in a £75k capital loss. Something to bear in mind.

getmore4less

£850p on £220k 4.6% gross yield less after costs.


Even with a good chunk of the borrowings on a residential rate it will be hard to make this pay.

ds2010

cheers friends,

yep thats kinda the plan. I hope remortage the current place and raise about £170,000 to buy the new house and change mortgage to but to let.

As long as the rent covers the mortgage payments im not bothered about breaking even just yet.

It's a long term plan and have faith that in London prices/rents will rise steadily.

feel free to correct me if im naive...

cheers