Advice requested on BTL numbers

Argonaut1_2

Hi all - first post - be gentle!

I am considering buying a house while keeping the existing one and letting it out as it is quite local. Here are the details:

Current house - value 225k o/s mortgage 55k - rental value 700 PCM after agents fees, expenses etc
Outlay required to buy desired house 350k
Salary 75k plus up to 20k per annum shares etc (not guaranteed)
Savings 30k

Could I use some of the 170k equity on current house to fund a decent deposit on the new one?

If so, do you think this is the job for a specialized lender or could a high st lender get their head round it?

Thanks in advance for any advice people may have!

dimbo61

Well you have plenty of equity in your current property and could borrow upto 75% of its value to give you a better deposit on your new property IF you can get a BTL mortgage on your existing place and still have the magic 125% rent compared to interest only mortgage costs!
Job for one of them "whole of market mortgage brokers" who can point you in the right direction re BTL mortgages

Thrugelmir

What's the gross rental value of your property?

The net rental income figure is before tax I assume. At under 4%, not a great return.

So you need to crunch your numbers carefully.

herbiesjp

If you need to raise funds from property 1 you will need to remortgage to BTL.

You will need to post the gross monthly rental figure that you could expect to get.

There are BTL lenders that could agree this for you no problem - you will need to find a lender happy to agree the mortgage for property number 2 though, whilst having the BTL in the background.

It is doable. However there can be hoops to jump through.

Not so much specialist lenders needed - only ones that are heppy with the overall scenario.

Have you spoken to a broker yet?

Argonaut1_2

I spoke to a broker today. They gave me the same sort of impression you guys have given me. Turns out that current house should be lettable at 950 pm. 75% LTV will give a mortgage Of 600 pm. Equity taken out of current house will fund > 25% deposit on new house.

Need to assess my attitude to tracker mortgages though - have asked the broker if there are fixed rate deals available as the ones initially illustrated are trackers (4.93 and 2.49% respectively).

The broker is whole of market and doesn't (necessarily) charge a fee.

Thanks for the comments - any others gratefully received!