Releasing Equity for 2 mortgages possible?

AlistairS

Currently in a 2 year tracker deal with Santander which ends next month. Got a letter from them asking to phone about a new deal.

Currently have my house on the market (1 week) but if it doesn't sell within a few months considering going down the buy to let route with this one & buying another to live in. I mentioned this to Santander & they said I could get permission to let from them but would have to leave the full equity in my current house & come up with 10% deposit for the next place.

Surely I could remortgage with someone else & put half my equity in & keep the other half back for deposit on another place? Is this possible?

GMS

How much do you need to borrow to redeem the current mortgage? How much is the place worth? How much rent would you expect per month?

AlistairS

GMS wrote: »

How much do you need to borrow to redeem the current mortgage? How much is the place worth? How much rent would you expect per month?

My current home has a home report valuation (Scotland) of £115,000. If it were to sell for that there would be approx. £39,000 equity. My selling estate agent, who also does lettings has indicated that a monthly rent of £550 is likely. I have spoken to a couple of brokers who say that buy to let is possible with 10% deposit

kingstreet

A buy to let remortgage of 90% is absolutely out of the question.

With many lenders requiring the rental income to exceed the mortgage interest (at 6% pa) by around 30%, £550 per month means a maximum mortgage of £84,600, or 73% of the value of the property.

With the £76,000 mortgage you appear to have, that means being able to borrow an additional £8,000 towards the deposit for your next home. You'd have to make up the deposit to at least 10% and cover the cost of moving and fees from your own resources.

AlistairS

kingstreet wrote: »

A buy to let remortgage of 90% is absolutely out of the question.

With many lenders requiring the rental income to exceed the mortgage interest (at 6% pa) by around 30%, £550 per month means a maximum mortgage of £84,600, or 73% of the value of the property.

With the £76,000 mortgage you appear to have, that means being able to borrow an additional £8,000 towards the deposit for your next home. You'd have to make up the deposit to at least 10% and cover the cost of moving and fees from your own resources.

OK thanks for the info

Wh05apk

kingstreet wrote: »

A buy to let remortgage of 90% is absolutely out of the question.

With many lenders requiring the rental income to exceed the mortgage interest (at 6% pa) by around 30%, £550 per month means a maximum mortgage of £84,600, or 73% of the value of the property.

With the £76,000 mortgage you appear to have, that means being able to borrow an additional £8,000 towards the deposit for your next home. You'd have to make up the deposit to at least 10% and cover the cost of moving and fees from your own resources.

Not forgetting that the BTL mortgage will be considerably more expensive, both rate and fees than staying on a consent to let with Abbey.

AlistairS

Problem is trying to raise the 10% for the other place. Any ideas of what the fees are for consent to let?

Wh05apk

CTL will only be a small admin fee (£150?) but once CTL is requested, lenders tend to "freeze" the mortgage preventing any further borrowing.