Buying new house but keeping old one

paulfoel

Currently own house with outstanding mortgage but plenty of equity. Got a great tracker rate which I dont want to lose.

What I want to do is buy a new house but keep the existing to rent out. Is this possible?

How would I do this? I probably cant get too 'normal' mortgages....

Would I have to port my existing mortgage with me to new house (and add more possibly) and then convert my existing house to buy-to-let mortgage?

GMS

You could leave the existing mortgage in place and as for consent to let from the lender. This would need a deposit for the new property to be in place.

Alternative would be to port the current mortgage to the new property and take a Buy to Let mortgage on the current place.

This could potentially raise a deposit for your new purchase whilst maximising your tax offsetting. May be worth considering raising the most you can on the new BTL mortgage.

Broker would be worth a chat here as many BTL mortgages are broker only.

Svalbaard

Hi there.

I am in exactly the same position as you and I looked around at all the options. In reality only two were available with only 1 being actually viable:

1. Get existing residential mortgage provider to agree to a consent to let then buy new house using other form of deposit (I managed to get First Direct to give me 12 months CTL but it is only a short term solution). You cannot take any equity from your existing property under this option.

2. Transfer existing house to a BTL, take some equity out at the same time, and use that + other savings as deposit for property 2.

I used BM for my BTL transfer and it has been all good so far, made easier that I have sitting tenants so was able to prove easily that rental income covers the mortgage.

Hope that helps.

paulfoel

GMS wrote: »

You could leave the existing mortgage in place and as for consent to let from the lender. This would need a deposit for the new property to be in place.

Alternative would be to port the current mortgage to the new property and take a Buy to Let mortgage on the current place.

This could potentially raise a deposit for your new purchase whilst maximising your tax offsetting. May be worth considering raising the most you can on the new BTL mortgage.

Broker would be worth a chat here as many BTL mortgages are broker only.

But then wouldnt option 1 mean I'd need income to allow 2 mortgages?

Option 2 - trouble is BTL have a large LTV.

paulfoel

Svalbaard wrote: »

Hi there.

I am in exactly the same position as you and I looked around at all the options. In reality only two were available with only 1 being actually viable:

1. Get existing residential mortgage provider to agree to a consent to let then buy new house using other form of deposit (I managed to get First Direct to give me 12 months CTL but it is only a short term solution). You cannot take any equity from your existing property under this option.

2. Transfer existing house to a BTL, take some equity out at the same time, and use that + other savings as deposit for property 2.

I used BM for my BTL transfer and it has been all good so far, made easier that I have sitting tenants so was able to prove easily that rental income covers the mortgage.

Hope that helps.

Option 2 sounds like an idea....

Conrad

paulfoel wrote: »

Option 2 - trouble is BTL have a large LTV.

Halifax will allow you another mortgage (assuming your'e not with them) and merely require you to state you intend to sell. If you then cannot sell you can perfectly well let out the existing place. You are supposed to inform the existing lender if you let it out, although some folk don't bother but you must have the correct buildings insurance policy if you do let the place in which case your lender may well be made aware by the insurer anyway.

This is not advice, merely information.

emmita

similar situation for me, ask your mortgage company if you can port your mortgage - I couldn't and am on a great rate. Nationwide if that helps.

Hubblebubble_2

Hi all, I have a similar situation as Paul. Are there any brokers or lenders that specialise in mortgages for people who already own property? (First Direct are they helpful if you want to let out your property temporarily or would they change the rate to BTL?) When a provider checks your credit what information do they gain? Is it the same as the Experian report? Good luck Paul. I think porting the rate is a good option for you to allow you the deposit for the new property.

kingstreet

There are plenty of lenders who will allow you to purchase another residence while letting a property. Shop around or contact an independent or whole market broker for help.

Some lenders tax you the monthly payments of the existing mortgage, while others will ignore a self-funding BTL "in the background."

The new lender will not care if the current mortgage is a buy to let, or a residential mortgage with consent to let.

getmore4less

The key is identifying where the deposit comes from and how big it needs to be.

remortgage of existing property, how much you can borrow restricted by the lending critera of BTL.

What's the place worth, what's the mortgage, what's the rental income.

if that releases enough equity then you have a deposit if not...

If you have the deposit then concent to let becmes an option but may not be a long term solution.

If the rental stack up and you have the deposit then there will be lenders for the new place.

paulfoel

Also, complicated by the fact that I dont have a traditional form of employment.

I run my own ltd company as an IT contractor. Even though, income is high, salary is low (paid mainly by dividends) and, ultimately, income is temporary. Past experience shows that most of the high street banks just 'don't get it' with people like me.