Thinking about renting out house, need advice.

trev1

Currently we are trying to sell our house but as yet no luck. We are interested in a new build house but until we sell we are stuck where we are. I have spoken to the builders about part exchanging but from what they've said, I don't think we will have any bargaining power. Another idea is to rent out our house and get a mortgage on the new build. At present my mortgage is about £400 month, where rental income in my area for the same type of house is £650. What I need advice on is can I rent my house out for approx £650/month, change my mortgage to interest only, which will make it approx £150/month. This will leave me approx £400 a month capital. Now, get a £200000 mortgage for the house I want, use the money from renting and my contributions to pay for it.
My apologies for a long post but is their something I'm missing or does this sound feasible?

Marvel1

Before becoming a landlord, always know what your responsibilities are:
http://www.direct.gov.uk/en/HomeAndCommunity/Privaterenting/RentingOutYourProperty/DG_189124

G_M

Before becoming a landlord read this post and all the links therein.....

You'll also need to either convert your existing mortgage to BTL or get consent to let. This may cost a fee and/or higher interest rate.

I doubt you could use the income from your rental for the purposes of your domesric mortgage - too unreliable - but see an independant mortgage broker.