mortgage advice needed please

illgetthere

hi, i was wondering if anyone could lead me to any products out there.

i have seen a property i wish to buy. its £150k.

I have 2 mortgages, 1 btl and 1 residential. The btl has approx 50k equity according to valuation.

What i wanted to do was use the equity to release a deposit to purchase this house, but after a chat with a mortgage advisor he told me that only cash is accepted as a deposit, and that refinancing isn't an option at the moment due to the current economy/situation.

I want to live here, not rent out, but have permission from my mortgage company to rent my current residential property.

Is this right? would i need to raise 30k as a deposit or is there anything out there that might be available?

Affordability isn't a problem, just the deposit.

thanks in advance.

Wakey2008

Hmm...let to buy is pretty much frowned up on by most lenders at present. Even if your current lender will allow you to do it is high unlikely, as your adviser has pointed out, that they would lend you the funds to do it.

Is the problem that you are struggling to sell your own house and you have come up with this 'I'll rent it out and buy another' idea as you are too impatient to wait for a buyer to come along?

jonathanmiller

If you have £50k in equity, then taking the money out of the Buy To Let is the issue.

No issues in principle in taking the money out but you'd need to be leaving at least 25% equity in this property for the better Buy to Let deals. Some are available with leaving 20% in the property but selling and releasing the whole £50k may serve a better purpose as mentioned

illgetthere

wakey, no i am not looking to sell my current house, but the one for sale is going very cheap and it has a business opportunity- workshop/parking etc.

Its a 4 bed bungalow on 1/4 acre. i am in lincolnshire but its still cheap even for this area.


thanks for the responses.

Thrugelmir

What are the values and outstanding mortgages on your 2 current properties?

illgetthere

200k value on residential with a 179k mortgage.

btl 139k mortgage, neighbour just sold for 190k, (ours has a large conservatory and bigger plot)

thanks

Thrugelmir

Are both the mortgages interest only?

illgetthere

btl is repayment, residential is IO.

Thrugelmir

Purely looking at the situation on a financial basis. You don't have enough equity in the properties you have already to withdraw any.

The BTL mortgage will require around 20%- 25% equity, and the residential property at 10% is far to low and could easily be zero.

illgetthere

thought that might be the case, thanks for the input/ideas though.