Switch to a Buy to Let AND buy a new home?

johnmac1869

Hi All, first post on here... I have been searching all over the web for advice on this without success. Any tips or ideas gratefully received.

Our situation. We have our flat on the market (Home Report value £100,000) and have just dropped the price to £95,000 fixed price - willing to sell fully furnished. However have had no interest as yet.
We know we can rent it out no problem at more than the mortgage cost (even if we switch to an interest only higher rate mortgage). So we are thinking of keeping the flat, renting it out, and buying a new place.

My question is - we ideally need the equity out of the flat (£25k) to put a deposit on a new place... is it possible to do this? Best I can find online is 85% LTV for a buy to let mortgage.

My current lender say that 75% LTV is the best they will do for a Buy to Let Mortgage.

Thanks

Notmyrealname

OK, having done this myself....

You need a LET TO BUY mortgage, not a BTL. 75% LTV is pretty much the ceiling. Not only that, the monthly rental valuation needs to be 125% to 130% of the monthly mortgage interest payments so if the mortgage interest is £300 a month, the rental value needs to be £375-£390 depending on lender.

Get the LTB mortgage first. That puts a cheque in the bank you use for the deposit for the house you need to buy and means you can move out and rent it out straight away once you've got the mandatory stuff like LL gas safety check sorted.

johnmac1869

thanks very much for the advice (apologies for the delay!). We have found someone to rent the flat for 12 months! Had to learn how to be a landlord legally very quickly but easier than I thought (So the great news is I am not paying anyone any fees!).

Just got a "consent to let" from Santander for £295, but will look into your advice now - as that could be great. In the meantime we are going to rent somewhere a little bigger in the location we want and continue to save.

Conrad

Many people let thier current resi property - there are pros and cons do it nd then obtain a 90% ordinary purchase mortgage on the new place with a lender that does not mind what you do with the current one.