Mortgage Advice

janz70

Hi, sorry about this dumb question but Im not that great at financial matters.

We are looking at houses in the region of £250K

We have our home that is mortgaged but has approx £70K of equity
My wife has a rental property that is mortgaged and has approx £70K fo equity

We would like to keep our home as a rental property if possible) selling the my wifes propety isnt really an option due to other factors but we would sell ours if needs be.

The main question being "could we get a mortgage for this amount and how do we go about releasing the equity from these properties

kingstreet

Can you edit the post to include what you want to ask?:p

janz70

Sorry if its not clear - just want an idea of how we can raise this 250K with our properties equatity and a mortgage, we havent ever done anything like this and want to have an idea of our options and how they work before seeing a mortgage advisor

kingstreet

Remortgage the one you want to let. You should be able to raise upto 80% of the value to repay the current mortgage and raise the deposit for the one you want to buy.

The rental income will need to exceed the interest-only mortgage cost by around 25% to 30% to make it work.

If you need extra capital, you'll need to remortgage your wife's BTL on the same basis.

By the time you've finished, you should have enough capital for a decent deposit on your new purchase. You'll have to be careful choosing a lender for it. Some will want to take into account the two other mortgages before calculating how much you can borrow. You need a lender who'll ignore the BTLs "in the background."

janz70

Thanks very much Kingstreet, it seems quite simple the way you have put it - hopefully we should be able to pay off "home" mortgage and raise just enough capital for a 20% deposit for the new place without having to remortgage my wifes rental property - maybe use this at a later date for an extension.

Many thanks again, you have put my mind at ease

PS any recommendations about those select companies that do the "ignoring"

I presume we must remortgage our "home " as a BTL if we are to let it - would the interest from this be tax deductable the same as my wifes other letting

kingstreet

janz70 wrote: »

Thanks very much Kingstreet, it seems quite simple the way you have put it - hopefully we should be able to pay off "home" mortgage and raise just enough capital for a 20% deposit for the new place without having to remortgage my wifes rental property - maybe use this at a later date for an extension.

Many thanks again, you have put my mind at ease

PS any recommendations about those select companies that do the "ignoring"

As you need two BTL remortgages and a purchase deal, I'd suggest finding a decent whole market or independent broker in your area who'll run the three applications for you.