Buying a new home when you already have a mortgage?

anastasia666

I just wondered if anyone has any advice on this. I currently own the house I live in. I am thinking of buying a property at some point with my boyfriend. The plan is to end up renting out my house, so in that case I presume I'd just have to try to change the mortgage to a buy to let.

But if we decide we'd like to buy a place together before the house is ready to be rented out, would I be able to be on the mortgage as a joint applicant? Or could I not do that unless I change to a buy to let mortgage on my curent house?

I worked out the maximum we'd be able to borrow (in theory) at Halifax (for example) taking my current mortgage payments into account, but I'm not sure if any lenders would consider a situation like this?

Thanks in adance for any help!

BitterAndTwisted

Everything depends on your level of earnings and how much you have borrowed to buy the current place.

Has becoming a landlord always been part of your long-term investment plans? It's not something I'd necessarily recommend if you just don't want to sell up and add the equity to the deposit on a new place together. There are ways to protect what you put in if your boyfriend has less than you or not anything.

kingstreet

We really need a sticky on the "accidental landlord" stuff, as these enquiries get more and more regular.

No, you don't need to change to a BTL product, you can ask your existing lender for consent to let. You may be charged a fee, a higher rate, or both, for the privilege.

Yes, you can be party to a joint mortgage. The new lender may tax your affordability with the cost of the old mortgage, may treat the monthly payments like a credit commitment, or may ignore it altogether.

Some lenders have lower maximum loans to value for second properties, so be careful with that.

Do you really want to be a landlord?

anastasia666

It's not really been part of my long term plan, but it is something that we've talked seriously about (we were talking about the possibiliy of buying places to do up and rent out). to some extent, doing up my house and renting it out is a 'good' way to test the waters and see if it's something we do want to do.

Part of my reasoning for not wanting to sell is that there won't be much in the way of equity (especially after my ex has whatever share he's due). Plus also this house is my security. If something were to go wrong, I wouldn't be homeless. OK, I'd (hopefully) have tennants in the house, but eventually I'd be able to move back in.

Otherwise I agree, it would be far simpler to just sell it.

pink_petal

I was in this situation a couple of years ago. My ex was buying me out of our flat but I was still named on the mortgage. He was dragging his heels but I wanted to buy another place and not rent so I just went to the bank and explained the situation. They looked at my income and outgoings and were fine.

Then a few months ago we had a good opportunity to buy a house in the area we want to move to next...a bit sooner than expected so our flat wasn't on the market yet. Again, spoke to the bank and they were fine as long as the mortgage payments could be covered. At that stage I'd have been on 3 mortgages (I'm now removed from the first one...after three years of trying!) and it wasn't a problem for the bank. As long as I could show that I had the income to cover the repayments.

BitterAndTwisted

If there's not much in the way of equity once you have taken over the mortgage in your sole name and paid off your ex, there's little likelihood of you qualifying for a BTL mortgage.

If there's no equity then there really is little to no "security".

To be honest, I'd resolve one mortgage issue before getting yourself into another.

Would you have enough income and/or savings to pay the existing mortgage plus your share of the second if there was no rental-income? If the answer is "no" don't do it.

anastasia666

The mortgage is in my sole name. It was my house but as we are married he's entitled to half of the equity. There will be more equity once it's in a better condition (the house is in a state and I'm holding off doing much until I've had it valued and sorted out the financial consent order).

Yes, I'd be able to cover both mortgages in full, as we would only be looking at places which we could afford on one salary (I tend to look at the worst case scenario!!) So would have more than enough to pay both mortgages with both salaries. the mortgage on my current house is fairly small.

I completely get where you're coming from though. I tend to err on the side of caution usually, and certainly won't be rushing into anything. Buying a house together sooner rather than later would be better though, as I would be much closer to work (which would save me over £200 per month straight away) and closer to his family and his work.