Another "let to buy" query, but with a subtle twist...

liamcas

Hi, I've read through the various posts about the subject but find it difficult to directly apply to my situation.

I own a home on my own, value £110k (low end estimate), mortgage 78k with HSBC. 75% LTV Mortgage at 2.45 plus base rate.

In the future I would like to live with my girlfriend. Ideally this would mean a joint mortgage on a second property whilst I have the solo mortgage on my house (ideally with an agreed notice to let from HSBC but not sure that would happen).

My income is 33k and hers is 25k. I think she could find 10k for a deposit but the only way I could front a similar deposit is to release some equity in my home.

Renting my house with 3 double bedrroms could fetch around £600 p/m. If I rented the rooms seperately, I would get an average of £250 for each.

So my questions are:

1) Can I get a joint mortgage when maintaining my own solo mortgage?

2) With a joint salary of 58K, a deposit of 10k from her and me releasing 10k, is it possible to get a second home whilst keeping my own rented?

3) Is renting rooms allowed instead of the whole property as obviously the returns are greater?

4) How does my existing home affect our affordability calculations....i.e. What kind of money could we borrow?

I'm sure there will be more questions but these are the starting point.

Thanks a lot in advance....

Conrad

Up to 90% on the new property is available, although 85% would deliver a much keener deal for you.

As for letting the current one, in any event you are supposed to alter the buildings insurance to reflect the risk accurately - lots of people forget to do this but they could be liable for millions if lets say a tenant and even neighbours were killed in a fire (cheerful eh!).

Be mindful that the new insurers often notify your lender of the new policy and the old cancelled policy may do the same.
I'm being a little dramatic here. Plenty of people do let thier existing home.

You can let rooms, indeed something I argue does often generate better returns if done correctly and to the right tenants with the right facility provisions.

You can try and do the new mortgage yourself direct to lender but you need to answer the application questions in a way that ensures you won't have a last minute issue come completion time > call centre staff often miss seemingly small and minor points that blow up big time as these threads can attest to . Halifax can consider such cases.

liamcas

Thanks for the advice. Do you have an idea about the affordability calculations when there is an existing property?

With 58k joint salary but an existing house in my name, how do they work it out. Do they ignore the existing property because it is being rented and do their standard multipliers?

liamcas

Can anyone help me with my query? I'd be very grateful.
Cheers

liamcas

Does anyone have any more advice about my query above?
sorry for keeping this post alive but i'm hoping someone can advise.

Thrugelmir

Currently you have a good residential mortgage rate on your property. So suggest you ask HSBC for their current policy on letting and whether you can withdraw the required equity.

If you are struggling to find a deposit from a new property why not add your partner to your existing mortgage? Repay the mortgage debt for a while then move when the time is right for the both of you.

Better to invest in property when you have accumalated more capital. Rather than taking on more debt at a time when interest rates are only heading one way.