Would this be possible?

ben2909

We currently have a mortgage on our home for £55k and have 45k In equity.
We wish to remortgage on this house and change it for a BTL mortgage putting down £25k so we have a £75k BTL mortgage on this house.
We then wold like to buy another house for £170k putting down the £20k equity from the other house + an additional 35k in saving so total of 55k deposit for the 2nd house that we will live in.
The problem is I'm not sure if we would get the mortgages based on our wages as I'm currently don't earn a lot as I have have been looking after our young boy while retraining and only earned 3k in very part time work last 12 months.
Based on wife's 29k wage + 3k my wage + 3k CTC/CB would we get the mortgages.
No outstanding finance and excellent credit rating.
TIA

kingstreet

You should be able to remortgage onto a let to buy product, with a maximum of the lower of 75% of the value of the property, or the amount which corresponds with the usual rental income calculation;-

rent = 125% of monthly mortgage interest assuming 6% per annum.

So, on a £100k property 75% is £75k, less the existing mortgage, £55k leaving you £20k less fees to add to your deposit for the purchase.

If the rental income is £400 per month, that corresponds with a mortgage amount of £64,000, so that's the maximum you could borrow, not £75,000 as the rental income calculation is the lower of the two options.

If the rental income is £600 per month, the maximum mortgage amount would be £96,000, so you'd be able to borrow the 75% maximum, £75,000.

As the amount of deposit is dependent on the rental income calculation as shown, it's not possible to say how much your onward purchase could be for. However, you should be able to borrow around £135k to £150k based on the incomes provided.

You will need a lender prepared to ignore the let property and mortgage in the background. If you are "taxed" the mortgage on the rental, your affordability and maximum mortgage would fall to an amount where the onward purchase may not be possible at the required level.

ben2909

Thanks
Rental income would be £650-£700 so that would be fine. As long as we could get another mortgage based on wife's wage we would be fine.

Dave_Ham

I concur, I would expect you to be fine.

You are likely to require a broker though, as not too many buy to let lenders will accept a let to buy (changing to buy to let from residential and raising additional deposit)

Should all be achievable subject to the detail though.

Best of luck