How to use existing BTL properties to get a mortgage for another BTL property

Skag

ViolaLass wrote: »

Getting a BTL mortgage solely to decrease your tax bill is like buying shoes you don't need in a sale to save £30.

Really daft.

OP - even if you're not an English speaker, does your native country not have mortgages?

I live in the UK for almost a decade, but as I said, never had to deal with mortgages or loans even in my home country. So, I'm completely unaware of any of this. Don't remember having discussion for lending with anyone either...

Skag

Foxy-Stoat wrote: »

I thought the OP wants to buy another property........

Thanks...;)

Skag

AndyT678 wrote: »

You have property worth £500k so theoretically you might be able to borrow 75% * £500k = £375k (assuming the income covers 125% of the mortgage interest)

You can then use this money to buy a house outright. You then have 3 houses with mortgages on the 2 that you currently have.

OR

You could use the £375k as a 25% deposit on a house of £1.5m and get a mortgage for the rest - extreme scenario but illustrates the point. You will then be mortgaged up to the hilt on all 3 houses.

A good example is what I was looking for actually thanks!

Also, ordered a book on these theories.

Skag

Foxy-Stoat wrote: »

Suppose you don't pay any income tax on the rents either?

If you do then you need to speak to an account and take out one or two BTL mortgages to help off set the income tax payments.

I remember reading about this actually but don't know much about offsetting taxes at this point...

Foxy-Stoat_3

You remember reading that you have to pay tax??

silvercar

Skag wrote: »

Here's the scenario:

Say I have 2 houses 250k worth each, with no mortgage on them. They rent for 1500pcm each. I want to buy a 3rd house for BTL purposes but don't have, or don't want to spend extra cash on a mortgage. Can I somehow use the hypothetical future cash from the 2 properties, plus the hypothetical future rents from the 3rd property to get a mortgage?
Also, where can I find more info on this?

You could mortgage each of your existing properties for upto 75% each, that would give you £375k that you could use as a deposit on property 3.

Three important caveats:

1. where do you live at the moment? Virtually all lenders require you to be an owner occupier (with or without a mortgage) yourself. So if you live in rented accommodation or with family they may not agree to give you a mortgage.

2. Do you have indefinite leave to remain in the UK? This can also be a concern for lenders.

3. Do you earn yourself? A lot of lenders require landlords to have an income themselves (to act as a buffer should the properties be empty).

ViolaLass

Foxy-Stoat wrote: »

I thought the OP wants to buy another property........

You said "If you do [pay tax] then you need to speak to an account and take out one or two BTL mortgages to help off set the income tax payments. "

Given that the OP wasn't talking about paying for the new property in any other way, I assumed that your comment was a tax-saving one rather than a suggestion of how to fund the purchase.

As a tax-saving device alone, it's daft.

Also, OP, you've 'ordered a book on these theories'?? You're beginning to sound like a troll now. Did you not start your search by googling? Picking up the basics of how a mortgage works would have taken seconds, however sheltered a life you may have led.

Skag

Foxy-Stoat wrote: »

You remember reading that you have to pay tax??

YES! lol :rotfl:

I was talking about the offset

Skag

silvercar wrote: »

You could mortgage each of your existing properties for upto 75% each, that would give you £375k that you could use as a deposit on property 3.

Three important caveats:

1. where do you live at the moment? Virtually all lenders require you to be an owner occupier (with or without a mortgage) yourself. So if you live in rented accommodation or with family they may not agree to give you a mortgage.

2. Do you have indefinite leave to remain in the UK? This can also be a concern for lenders.

3. Do you earn yourself? A lot of lenders require landlords to have an income themselves (to act as a buffer should the properties be empty).

1. UK, I am a UK resident (and from EU), just not native. The properties are rented out to students.

2. Same as 1.

3. Yes, I've got a full time job as well.

What does the "up to 75%" depend on? Is this a rule of thumb or negotiable?

Skag

ViolaLass wrote: »

You said "If you do [pay tax] then you need to speak to an account and take out one or two BTL mortgages to help off set the income tax payments. "

Given that the OP wasn't talking about paying for the new property in any other way, I assumed that your comment was a tax-saving one rather than a suggestion of how to fund the purchase.

As a tax-saving device alone, it's daft.

Also, OP, you've 'ordered a book on these theories'?? You're beginning to sound like a troll now. Did you not start your search by googling? Picking up the basics of how a mortgage works would have taken seconds, however sheltered a life you may have led.

Oh man...YES I've googled everything, and YES I've searched a lot including this forum...This thread is not about the book though, I've ordered a book for the same reasons someone would ever buy a book. Let's not digress. I was after an example of how I can get a mortgage base on my properties and got one. If you're going to contribute on this as other did then please go ahead, no point getting judgemental.