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Renting out old to buy new
Options
JohnBoot
Posts: 9 Forumite
After some help and advice please before visiting a mortgage advisor? We are considering renting out our current home which we own outright and buying a new house. I wanted to get clear in my head how we would borrow the money needed to buy the new house. For discussion sake’s say the new house is worth £175k we have a deposit of £35k so would want a mortgage for £140k. Would we be able to get a mortgage for that amount if our joint annual income was about £40k? As we have equity in the other house and without rent would still be able to cover the new mortgage? Or would we be asked to free up some money from the existing property?
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Comments
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This can be done - speak to an EXPERIENCED broker - and don't go for the one that is fees free unless you are certain they know what they are doing. There is a legal loophole. Remember, cheapest isn't always best when it comes to brokers / actors / cars / architects.0
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You say this can be done what without taking out money from our current property. Just having a mortgage on the new?0
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I'm not sure Conrad read the OP like I did, as he seems to be talking about something I can't see. Legal loophole?
The proposition you mention seems straightforward. 4.5x income is normally available, subject to other credit commitments and outgoings and a reasonable term remaining until retirement. The loan to value, 80% is within many lenders' limits for a second property.
As the rental income on the current property isn't needed and there's no mortgage outstanding, there are no "retained property" issues to worry about.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Kingstreet Thanks I wanted to go with a little more understanding of our options. But as you've clarified it seems straightforward, I can now approach them with a little more confidence we can proceed as desired.0
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G_M Thanks for the info was considering using a letting agent to look after things. Is there anything else you think we need to consider0
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