i want to buy a new house and rent out my existing one

n7wmd

right so i'm looking to buy a bigger house and want to rent out the one i'm now in, I owe around 100k on the mortgage and the house has just been valued at 130k. I'm orobably looking to buy a new one for around 150k. I've been looking at the mortgages online but not sure what i'd need to do and what would be the best:money:cheapest way of doing this?? thanks wmd

BoGoF

Details of your income/other debts?

What sort of deposit do you have for this new place

n7wmd

£15k deposit for new place

income wise myself 25k my wife 15k debt £200 monthly car loan

hcb42

is that £15K on top of the £30K released in the sale, makes quite a sig difference to LTV and therefore interest rate option?

herbiesjp

helencbradshaw wrote: »

is that £15K on top of the £30K released in the sale, makes quite a sig difference to LTV and therefore interest rate option?

The OP is not selling though

herbiesjp

What is the mortgage payment on your current place?
What is the expected rental income when you let it out?

Have you requested consent to let from your current lender?

hcb42

herbiesjp wrote: »

The OP is not selling though

oh yes. long day.

n7wmd

hi its 15k for deposit on new property, is it right that i would need 75% ltv on the property i want to rent out?

n7wmd

herbiesjp wrote: »

What is the mortgage payment on your current place?
What is the expected rental income when you let it out?

Have you requested consent to let from your current lender?

current repayment £400 expected rent £450-500 and no we havent requested consent yet

herbiesjp

Some lenders will be ok with that rental cover, offers will want more i.e. 125% coverage.

Also the consent to let will be based on the criteria of the lender in question - there are no guarantees that they will agree to it.

Your best bet is to speak to a good whole of market adviser and discuss what you want to do.

Wakey2008

Best bet is to see if it is possible to do with your lender before you potentially waste your time and their's at an IFAs.

It looks like a classic 'let to buy' case. This is where a borrower is so eager to move they can't wait for their house to see in these hard times and play the rental system to get what they want.

A lot of lenders have wised up to this and don't allow it anymore. If they do allow it they will probably want some extra security on the rental income ie it covering at least 125% of your payment at SVR (if you have a low rate tracker they won't rely on this always being the case so they will use their highest figure).

Also, you are going to stuggle to find a good rate mortgage with only a ten percent deposit on the new house.

Consider as well if your income will cover both mortgages if you don't have a tenant in. If the answer is no or you would seriously struggle, then you should maybe think again as it's too big a risk.

If it is the case that you are doing this as a short term fix because you want that new house but can't find a buyer for your own then you really should tread carefully. Impatience can really bite you.