Remortgage to BTL plus new mortgage possible?

zebedee78

Hi all, I'm just looking for a bit of advice as to whether the plan I have in mind is possible\realistic or if it's just pie in the sky.

I currently have one bedroom flat, for which I paid ~£82k in 2004 and currently owe ~£42k on the mortgage. I'm looking to buy a house to have some extra space and to be closer to work (the sixty mile a day commute is getting tiresome!). But I don't really want to sell the flat first, partly to avoid having the hassle of having to move in a single day, and also because the potential rental income (based on the going rate for similar flats nearby) would easily cover the mortgage payments so it'd pretty much be paying for itself.

So, what I was thinking of doing was switching the flat onto a buy-to-let mortgage, and then taking out a new mortgage to buy a house. The sorts of places I've been looking at are in the region of £200-250k, and I'd be looking putting a deposit (from savings) of 20% towards the purchase, so would need to borrow around £160-200k.

My salary is approx £50k, I've no debts other than the existing mortgage on the flat, and monthly credit card spend of around a thousand a month between two cards (both paid off in full every month). No dependants, I've been with my current employer for five years and the job feels very secure, my credit report shows 999 on Experian and 5/5 on Noddle.

Is this likely to be possible, or am I being unrealistic? If it's possible, am I likely to be best off going through a broker to arrange both the re-mortgage of the flat and an AIP for the new mortgage at the same time, or doing the two seperately?

Any advice or thoughts would be much appreciated!

Thrugelmir

zebedee78 wrote: »

(the sixty mile a day commute is getting tiresome!).

Are you prepared for the hassle of managing the property?

Let_Us_See

Yes, to your question. A very realistic, practical and straightforward proposition.

Yorkie1

Have you double checked that your lease permits you to let the flat out?

zebedee78

Thrugelmir wrote: »

Are you prepared for the hassle of managing the property?

Yorkie1 wrote:

Have you double checked that your lease permits you to let the flat out?

Good questions both. Having checked the lease I do need permission from the owners assoc. board to sub-let, but I don't anticipate this being a problem as a number of other flats in the block are currently sub-let. I believe one of the requirements to sub-let has been the use of an approved\recognised letting agent to manage the property so that should reduce the day-to-day hassle, albeit at a cost.

Let_Us_See wrote:

Yes, to your question. A very realistic, practical and straightforward proposition.

Thanks for the encouraging feedback!

I think my specific areas of concern, that I somehow missed from my rambling first post, are:
Is a cumulative multiple of almost 5x earnings (£200k + 42K) still possible these days?
I am I right to assume that a BTL mortgage will not prevent me from continuing to live in the flat until I find and successfully complete on a house?
Is there a need to wait between arranging the BTL mortgage and the new residential mortgage, or can I do both at the same time?

Let_Us_See

Yes, there are lenders still willing to consider up to 5 x income as long as not too high LTV and good credit record. I don't think there would be any objection if you decide to temporary live in flat until completion of purchase - especially, if you don't tell them!