HELP! I own a flat outright and want to buy another. What type of mortgage?

MoneySavvy_2

Things are starting to get a bit clearer now.

And, zenmaster, I totally like where you are coming from. I wasnt even aware that this is an option. It makes no difference to me which flat I live in. Would the mortgage lender not question why I moved from one to the other though? Do I need to be a bit creative here, obviously totally staying within the law? Would you know any excellent mortgage advisors at all or are you, indeed, one?

holly hobby, I understand your concerns, appreciate them and this is more food for thought. Therefore, should I go ahead with the purchase, I will introduce "landlady opening hours", ie. don't bother me when Strictly Come Dancing is on! :rotfl:

holly_hobby

Just be honest, and tell them (if asked) that you intend to let your unencumbered property (they may want a copy of the AST) - as long as their loan is only on 1 unit in the propety, and you satisfy their income and status checks, there shouldn't be a problem I would guess.

As said earlier, if you need the rental income to up your own income, Nationwide BS will consider a portion of rental income recd on an unencumbered (mortgage free) property.

One very important thing to note though, is that you will be unable to offset your own monthly mortgage costs, against rental income received (on the rented flat) for income tax purposes. Although you will still be able to offset such things as, maintenance and management costs to name just a couple of allowable HMRC deductions.

Your local yellow pages should have a directory of advisers in your area - check you are happy with their fee structure before you proceed.

Hope this helps

Holly

MoneySavvy_2

Many thanks for the above.

With regards to "Your local yellow pages should have a directory of advisers in your area........". This is why I am now looking for a recommendation; I tried your suggested route and the mortgage advisor is pants.

Fishingtime

zenmaster wrote: »

Could you not rent out your existing (mortgage free) flat and purchase the new one on a residential mortgage to live in? No buy to let involved.

You took the words right out of my mouth :rotfl:

MoneySavvy_2

OK, I am trying to get my head around this one from a legal implication. How do I then "class" my existing flat? What will it "become" in the future. What am I trying to ask here.... ehm... dunno. Crystal ball, anyone? Can anyone read my mind or at least guess where I am trying to go with this?

MoneySavvy_2

Agghhh.... :mad:

GMS

Your flat will remain an unencumbered flat unless you choose to raise finance against it.

Before you do anything you should speak to some lenders and run the scenario by them. Some would have issues with you owning both properties as this means you will own 100% of the development and could be classed as over exposed.

Make sure any prospective lender is happy with the properties before paying any fees.

A residential attached to a rental has been known to cause issues too so you need to make sure both scenarios are acceptable prior to parting with any fees.

MoneySavvy_2

Dear All

I'd taken the last few days off (work) to look into all your suggestions and things are becoming much clearer now, especially the remortaging my existing flat bit. At this point, this seems the most attractive option.

GMS: I will eventually buy the freehold of this two flat property. This house was converted into two flats in the 80s, the freeholder is absent and me being able to manage the whole property puts my mind at ease.

The next thing to consider now is the type of mortgage and I've been introduced to the idea of off-set. Anyone any pros & cons on this option?

Thrugelmir

MoneySavvy wrote: »

Stupid Q[/U]: A business plan to let a flat??? Tell me more...
[

Then why the need to ask stupid questions yourself?

I need some good mortgage advice on how to try and pay the 2nd mortgage off in 10 - 15 years.

Perhaps listening to people may help rather than referring to them as PANTS. Particular if you show the same attitude when conducting business.

MoneySavvy_2

Hey Thruglemir,

My decision making is based on all the fantastic advice I've received in this thread (apart from the rubbish one about some business plan, who on earth posted that one??) and not based on the info provided by aforementioned PANTS mortgage broker blokey.

I have appointed a much better broker now and am making informed choices from this thread, new broker blokey, my now appointed solicitor plus lots of people who manage several properties successfully. In the meantime, I'm still grateful for tips, thoughts, advice from this thread so keep them coming....