Old house rented out, considering buying another to live in.

cmj1977

Hi All

A few years ago I moved areas and rented a house, letting my old one out. I'm now considering buying a place here. I never really planned to be a landlord, and long-term I'd probably want to sell my old house.

I'm sure this is a not-too-uncommon thing to do - so what's the wisdom on it? Is it possible to get equity from the old place as deposit for the new one, or do I have to just use savings for that (I could probably just manage 10% with savings).

The mortgage on the house that's let out is a normal repayment one and is out of any fixed term. The income from the house covers the mortgage and costs and a bit to spare.

Any hints would be useful.

Thanks!

holly_hobby

You may remortgage your current let property to release equity to fund your next purchase - also as this is classed as capital withdrawal it is fully tax deductable ( as long as the new borrowing is no more than the value of the property when it commenced being let, if the total borrowing exceeds this the element over the said value isn't tax deductable from your rental income).

Generally, rental income of 125% of the mortgage payments (which may be interest only), some require the applicant to also have a min income of 25k, some don't apply this criteria.

There are some fee free BTL remortgage deals about - I would suggest discussing your requirements with a whole of market mortgage broker (check their fee basis), whom will not only source the most suitable provider for you, but also guide and support you throughout the whole application process and beyond.

Hope this helps

Holly