Buy-to-let - confused?!

UsernameAlreadyExists

GMS wrote: »

What rental income would you expect monthly? This will be the driving force of the loan amount, not the LTV.

Work on 125% of the mortgage payment based on interest only at 6% for a rough guide as to what the rent would need to be.

The Zoopla estimate is £821 pcm, I've not had an estate agent round to value it for rental. only to sell. He said 190 to sell, when I thought 180. Zoopla think 181!

holly_hobby

UsernameAlreadyExists wrote: »

Please see this thread!
https://forums.moneysavingexpert.com/discussion/4342811
*still not read your entire post.

EDIT: read it now ... alot of what you've said susequently hangs around NOT being able to move mortgage. but from what I've understood from the call to my bank, it seems I can?!. It's a current account mortgage which is apparently not entirely standard!

You can not move/transfer a mortgage from one property to another - as already explained in the previous/other thread you have on the subject.

You are transferring the mortgage PRODUCT not the BORROWINGS.

When you apply for your the mge on your new house, the total amount of mge reqd to pch it, will be subject to status and affordability assessment (as a new app) as is a requirement for new borrowings. With as I say the porting of the rate/product if permitted by the lenders agreement and if not LTV restricted, then applied accordingly for its remaining term - which is confirmed by ...

UsernameAlreadyExists wrote: »

Yes, I shall do.
They'd said I need to contact them when I have the specific details of the new property to kick it all off as they'll need to "underwrite it" (her term, she used it on the phone) etc. They'll also be able to provide the mortgage in principal etc.

Mge in principal bascially being an AIP which relates to new applications.

Hope this helps

Holly

UsernameAlreadyExists

Sort of ... but I need to google "pch" now.
I sort of understand the concept of the product now, but as I'd said in the other thread, the LTV will still be well below 50% on the "new house".
I am still somewhat confused as to whether or not I should continue on this track as I don't know if the Zoopla quoted £821pcm would satisify the previously mentioned 125%. I haven't got my head around the 60-70% bit yet, combined with the finding an additional 70K on the new house, and my calculator skills combined with several glasses of Port are not helping me one little bit. Thank you both so far, I shall go back and click the "thanks" button a lot and read this again when I can figure it out. *cheers* hic

holly_hobby

Sorry ....

Pch = purchase
LTV = loan to value
AIP = agreement in principal
RMG = remortgage
TSF = transfer
BTL = buy to let
CTL = consent to let

Hope this helps ... with apologies for any I've used others which I've missed off the above list .... (I'm a little tinker for shorthanding things were possible !)

Holly x

holly_hobby

UsernameAlreadyExists wrote: »

Sort of ... but I need to google "pch" now.
I sort of understand the concept of the product now, but as I'd said in the other thread, the LTV will still be well below 50% on the "new house".
I am still somewhat confused as to whether or not I should continue on this track as I don't know if the Zoopla quoted £821pcm would satisify the previously mentioned 125%. I haven't got my head around the 60-70% bit yet, combined with the finding an additional 70K on the new house, and my calculator skills combined with several glasses of Port are not helping me one little bit. Thank you both so far, I shall go back and click the "thanks" button a lot and read this again when I can figure it out. *cheers* hic

What will be the mge on the property to be let, and we'll work out what you need rental wise.

H

UsernameAlreadyExists

I think I'd put some of the details here already ... but ...

Current house = 180K (estate agent says advertise for 190), and accept haggles. I don't expect much more than 180.

I currently owe nothing on this house. and have some "savings" (sorry for quoting that ... but having had an offset for so long, the concept of savings is still quite alien to me ... and seeing a positive amount on the balance from an ATM is very weird).

Looking to move to an advertised ~300K place. I suspect they'll take 285 as it's been on the market for a while.

My maths, with EA fees (possibly - might DIY it), stamp duty, conveyancing etc ... mean that I move there, and end up with a 75K mortgage. on my own. So old place is gone, new place is 285, and I have 75K mortgage.

Now ... trying to retain the current place, but with a BTL joint with the partner.

holly_hobby

So your property to be let is unencumbered (mortgage free).

If you wish to retain this property so won't have the equity to put down on your new one from its sale, how much do you need to release from it to enable you to move ?

Once we know this, we can tell you how much rental income you'll need to make the figures work.

Holly

Thrugelmir

UsernameAlreadyExists wrote: »

Now ... trying to retain the current place, but with a BTL joint with the partner.

Take a step backwards. BTL is a business not an investment. With reward comes risk.

Is your current property the ideal one to let and run as a business?

I ask this question with a whole range of questions in mind.

kingstreet

If the property commands a rental income of £820, this equates to a maximum £131,200 mortgage.

If the property is worth £180,000 and a BTL lender will advance you a maximum of 75%, that is £135,000.

You can borrow the lower of those two figures, £131,200.

Net of fees and costs, that should give you £120k deposit for the new main residence.

Assuming a new lender will offer 4x joint incomes and ignores the BTL "in the background" you'd be able to borrow £252k. If you buy for £285k with £120k deposit, your new mortgage needs to be £165k.

Now we've sorted out what you can do, you need to consider what you actually want to do...