Renting my House, Buying another

PierremontQuaker03

Hi, I am after some advice to see how things can be done with my current situation.
I currently owe approx 30k on my current and only house, and have been told that if I rent it out I could expect 750 per calendar month.
Rather than selling in this climate I would rather rent it out and let the rental income pay for the rest of the mortgage - I have been told this 30k would then become a buy to let mortgage which will be a bit more expensive - but I hope within 5 years this mortgage will be paid off - then the money I will get will go towards paying the mortage of a new house to help me pay that mortgage off quicker.
The house I am looking to buy is 230k but I may be able to get it for 215k in the current climate, I have 10k saved up but that will pay for fees and moving costs. I earn 37.5 k per year, my wife works and earns about 10k, we are both in our mid thirtees.
Anyway I am just wondering to cuta long story short if this is affordable and what my options are,
i.e. the 30k I owe on my current property, I could re-mortgage over 25 years again, my mortgage payments will be small, then I could use this rental income to put towards the 215k mortgage.
I currently bank with Barclays and have an offset mortgage with the Woolwich, and I have spoken to them but could not give me a definate answer on how much I can borrow etc etc.
Any advice on what to do would be much appreciated. I would go and see an independant adviser but I do not want to waste their time until I understand what all of the options are.
Thanks

Dave_Ham

Hi,

This is definitely achievable and without full details would not want to put you on a different path.

My gut says if possible you would be better off raising more on your current property on a let to buy basis.

You can then add this to your deposit in order to facilitate a lower interest rate on your bigger mortgage and thus reduce your overall "real" payments.

You could also achieve consent to let on current mortgage, but given the amount you would save vs a bigger mortgage with higher rate cannot see this as a good option.

Largely depends upon credit score and the value of your current home?


All the best

PierremontQuaker03

thanks for the advice.
Value of my current home is 135k
My credit score is excellent.
From your answer can I summise....
So basically I could borrow another 100k on a buy to let mortgage on my current home - with the 30k still owing - to bring it to 130k and then the rental income would pay that debt.
Then I would borrow the other 100k or so on a normal repayment mortgage
Does the above sound right?

Dave_Ham

Nearly - you will only get to about 75% of the value of your current home and then yes apply for a smaller mortgage on your new place, which will have much more appealing rates/fees.