Mortgage advice

flick13_2

Hello,

I have posted this question on the forum before but only got one reply, so reposted. I just require a little advice and help please.

Currently living in a 2 bed property, valued at £280k with a mortgage of £85k. We have an expanding family and are thinking of moving in the future. We have a joint income of £45k per year. We want to consider the idea of renting out our existing property and buying a bigger house in the area.

There is currently a house in the area which is approximately £300k which we could make into our family home. We currently have savings of approximately £25k and we are realistic in the fact we could borrow some more money againstour currently property to give us a healthy deposit towards a new home (if our lender would let us do this…)

My question really is what view would lenders take towards us? We don’t have a fantastic annual income but we currently have a fairly small mortgage on our current property. Will our annual income generally affect the property which we would be able to buy? e.g £300k house is a little too expensive....

Any help would be appreciated!

Dave_Ham

Hi this is just about feasible, although your specific lender will make a difference due to raising finance and then potentially a consent to let.

Without this being accepted, you would potentially still have options for sure raising finance and taking a conventional buy to let/let to buy on your current property.

I would speak to your bank first (remembering they only have their products to offer) and without them performing an unhelpful credit search and then way that up against having a free chat with a broker.

Good luck

bigadaj

Just remember its not what the bank will lend you but also what you can afford. Problems with the rental property, in terms of voids or bad tenants, and you would be looking at servicing two mortgages, presumably with total borrowings of around a third of a million.

Not advice or recommendation either way, just a reminder to think and do your homework before committing to anything.

As dave says things look a little tight, you'd presumably up your borrowing on current home to 75% ltv, use that money for your new deposit and so have a mortgage of a bit over 150k, not too stretched but still up to 3.5 times joint salary.