2 properties, one mortgage?

Islandmaid

Hi all,

Need a bit of advice.

My partner and I both own properties, his worth approx £160k with a £40 mortgage, mine worth approx £210k with a £120k mortgage.

We are thinking of moving in together, and wondered if it was possible to raise capital from his property to pay off my mortgage, and then let his out. Is this possible?

We both work, and understand that we may have to take out a buy-to-let which will be governed by the rental income - quotes at approx £650 pm.

Thank you in advance.

Annisele

In principle you probably can borrow *some* money against his property to pay yours off.

However, if you want to pay yours off completely, you'd need to borrow a total of £160k - and you're not going to get an 100% mortgage on his property. You might be able to get £160k against your property and use that to pay off his mortgage, but I think not the other way around.

dimbo61

Time to talk to a " whole of market mortgage broker" who deals in BTL mortgages
He/she may be able to guild you in whats possible
IE borrow an extra £80K from your B/F property and rent it out IF the figures stack up IE Rental income 125% of mortgage costs.
You pay £80K off your mortgage balance IF no ERC,s to pay
You are looking at a couple of thousand pounds to set up BTL mortgage and higher rate as well
Or he could ask for consent to let and move in with you ( 2 incomes better than one)
The other property is making a profit for a few years ( sell before the 3 years Capital Gains Tax)

Islandmaid

Many thanks for your replys, some things to mull over, we will talk to a broker as you advise, and see what is possible, didn,t consider raising more on my property, it might be the way to go if the alernative isn,t viable.

holly_hobby

Re CGT.

There is an automatic CGT calcualtion, but not necessarily a liability, f you dispose of the property after the 3rd anniversary of it ceasing to be your nominated main residence.

If it previously acted as your main residence, and subsequently let, there are significant allowances that may be applied against any gross gain realised.

Hope this helps

Holly

getmore4less

Why bother changing,, if your curent rates are good then it will just cost more.


What you need to look at is getting whatever lending you have, up to the value when first let, allowable for interest relief.

The lending does not have to be on the property let.