New mortgage. Where do I stand?

Run_of_the_mill

Hi,


I wonder if someone here could make things a little clearer for me.


I currently have a mortgage (not buy-to-let) on a house which I rent out. I'm looking into the possibility of getting another house to rent or sell on.


If I cleared the mortgage on my current house and therefore be mortgage free, would I be able to get a 'first time buyer' mortgage or would I still have to go down the buy-to-let route?


Any help or advice would be appreciated.

ACG

You wouldnt be a first time buyer.
First time buyer mortgages and pretty much the same as any other mortgage at the minute, i cant think of any that stand out.

What is it your trying to achieve? We might be able to give you pointers on how best to get there.

Run_of_the_mill

Thanks for your quick response.


I'm trying to find out the best (cheapest) method of obtaining another house for rent or re-sale. Is it worth clearing the mortgage on my current house or should I put that money towards the payment on a buy-to-let? The thing that's putting me off BTL is the amount you have to put down.


With all this, I'm assuming you can't have 2 'normal' re-payment mortgages at the same time...or am I wrong? (probably! )

ACG

You need to decide what it is you want to do (Rent or sell) as the 2 options will most likely result in different products (If your renting, it will likely be the cheapest rate/fee? and this will depend on the size of the mortgage. If its to sell, then you may be looking for a mortgage with no early repayment charges?).

If you do it on a BTL mortgage, you can also do an interest only mortgage rather than repayment.

You cant/should'nt have a residential mortgage on a rented out property without consent to let. If the lender finds out they may call in the loan, your building insurance may also be invalid.

My advice would always be if you intend to invest in property do it the right way. If you get caught out doing it the way you seem to want to do it you could end up a creek without a paddle.

---I have edited this post.---

Run_of_the_mill

Thanks ACG. I want to do it 'the right way' but not sure of what is possible. My current lender and insurance company are aware that the property is rented. I just wasn't sure if I could take out another residential mortgage whilst still having a current one.

ACG

You would need a BTL mortgage if your intention is to rent it out.
If your intention is to do it up then sell then you might need development finance or a BTL or light refurb.

A residential mortgage is only there if you intend to live in the property.

As biased as it sounds, i think your best speaking to a broker. Most BTL products are available through brokers a lot are only available through brokers. They can find a deal that will fit in with whatever your intention is (to rent or do up and sell).