Looking to move - 2nd home mortgage advice

MrsRsonthecase

We are based in Manchester and my husband has an buy-to-let mortgage on a flat. The mortgage is currently £170 pcm (interest only). We have £21,000 in savings and are looking to buy a house to live in on a repayment mortgage in both our names.

I am a teacher on a salary of £25,000, my husband is in local government on £37,000. We have no outstanding credit card debt but are repaying a loan to Sainsbury;s bank at a rate of £270pcm, for another 14 months. Other than that we have no outsanding financial commitments.

We are unsure what our mortgage options are and would like to be a bit clued up before approaching a broker.

Any help would be much appreciated! Mrs R

Pont

My initial advice would be to rid yourselves of your Sainsbury's debt. this should be relatively 'painless' on your joint income (think of the interest charges over 14 months!).

Once that it sorted think about the existing mortgage (buy to let) as opposed to the income of the 'let' element. I would hope the rent would more than cover the mortgage thus increasing your monthly income.

Try to add to your savings pot whilst the rest is sorted out and I would think you're both in a relatively good place to be (depending where you live in the Manchester area)! £62,000 as a joint salary, with no existing debts, with an additional income (buy to let) would usually, IMO, put you both in a good place to move forward.

kidmugsy

A mortgage is likely to prove cheaper if you can supply a large deposit; once the loan-to-value ratio (LTV) falls below 75%, or even better 60%, you could realise big savings. You might therefore try comparing the sums if (i) you don't raise capital by selling the BTL property, and (ii) you do.