Buy to let or not

domino2112

Hi Everyone

I currently have a mortgage on a property valued at around £115k, with £97k left to pay.

I am about to start renting the property out and will then be renting somewhere else with my partner.

What I would like to do is
a) reduce the mortgage payments on the property
b) be in a position where my partner and I could get a mortgage and buy somewhere together.

I've been looking at possibly getting a BTL mortgage with my partner on property A to then allow us to rent elsewhere for now with a view to buying something else but the deals don't seem to give what we need.

What would be your advice on the best course of action as the current mortgage rate and payments I have are pretty steep and also keeping me tied to the first house.

Thanks in advance

Dave_Ham

Think you may need to give us a bit more information to go off.

I would personally like my mortgage payments to reduce and the term, but the reality is this is not going to happen...

Lets not forget you want to rent your house out, after signing it up for a residential mortgage. Unfortunately whichever way you turn, this will work our more expensive than your already "steep" payments..

Sorry...

kingstreet

There isn't enough equity to remortgage onto a BTL and to raise a deposit for your next home. That means asking your current lender for consent to let and using your savings for the deposit instead. Ask them if they'll convert your mortgage to interest only as well, as only the interest can be offset against the rental income for tax purposes.

Many lenders will ignore the mortgage on the let property when calculating what you can borrow for the new purchase, or at worst will treat it like a loan and deduct the monthly payments from your income.

Study the legal requirements for becoming a landlord and ensure you change your buildings insurance to a non-owner occupier product.