buying a second home/house

busterkeye

Hi Everyone
Me and the Mrs are going to the bank on sat to see if we can get a mortgage to buy a new home, dont know if we'll get one because we have been with a debt management agency for the last few years, anyway here our detais and what we are thinking of/options

we have a terraced house that we live in at the mo prob worth about 80k, we owe 30k at the mo and we have 7.5 years left on our mortgage, we are thinking of either selling up and putting the 40k (i say 40k because we might not get 80k or we may have to drop the price for a quick sale) toward the house we have seen which is up at 150k or trying for a mortgage for the full amount of 150k and extending or 7.5 years on the house we have now to 20 years and keeping it to rent out.
If we keep the terrace house would we be able to add the extra we would earn from the rent to our earnings to help us get the 150k mortgage?

if anyone can help or advice please feel free to do so
also is there any schemes out there that help people wanting to buy to rent? im sure someone told me that there were

hope you can understand my ramblings because im rubbish at writing lol

busterkeye

Werdnal

A few starter points you may not be aware of:

You cannot rent out a house on a residential mortgage, without gaining consent to let from the lender. If you are planning to increase the borrowings and let it, they will no doubt request you change to BTL mortgage.

I am fairly sure you cannot use "projected" rent as guaranteed income to gain a higher mortgage on the new property.

You have to comply with loads of laws and regulations to let a property, and there are hidden costs (HMRC tax declaration, LL insurance and repairs and maintenance obligations are just a few). Read this:

http://forums.moneysavingexpert.com/showpost.php?p=41160642&postcount=12

to understand what letting is all about.

I suspect if you are already under debt management, any increase in borrowings either for a new mortgage or against the existing property will be subject to scrutiny anyway. How will you cover the mortgage(s) if the rent dries up for any reason? It can take several months and a court case to evict a non-paying tenant, and all the while you have your own living expenses and the letting property costs to support with no rent coming in.

TBH I think you are better selling, buying a new place if you can afford the mortgage, and avoiding the added stress and financial commitments of a letting property - it is not all ££££ in your pocket by any means!

busterkeye

ye i know i need permission and change the mortgage to a BTL also that the interest rate will increase a little too,

i didnt think we would be able to use the projected rent to gain a higher mortgage on another property either but you never know

thanks for the link ill have a peek

sorry i should have said that our debt management plan is up in 4 months time, so we will have more money at hand, also the wifes wage will go up by 6k a year too, this is why we are thinking of buying

thanks for your thoughts and help

busterkeye