Additional Borrowing, second home

humadoon

Hi

I want to buy a second home ...

How to generate capital (Deposit) for that

Option 1: Sell my current house as its value has gone up and i have like 45% equity in it as per current market valuation (e.g house value £260k Mortgage £140k)

i sell this house it'll give me about £120k and buy 2 houses outside London 1. 2xbed for £130k with 25 % deposit (£32500) and 2. 3xbed £140k with 25% deposit (£35k) on buy to Let. invest the remainig £50k (i have round figured it) or keep it for rainy days.

Option 2: Keep my current house (which is on a prime location) and borrow additional amount of £35K from my equity (Which i need for BTL property which is £140k)

Note: I am keeping in mind the Agent Fees, solicitor fees etc (i will use my savings for that)

My salary is about £30k excluding overtime

I understand this has risks however i want to do this which i understand.

please assist me with your valuable suggestions

humadoon

any help is appreciated?

Thrugelmir

You'll struggle to obtain a mortgage for £175k on your basic income. Nor I suggest would it be sensible to combine such a commitment with a BTL property.

Releasing the equity and having a minimal mortgage on the residential property is the better option.