Let to Buy advise

r66bby

Good evening. I have been searching for some answers but can't find anything so i thought i would be better starting my own thread.

My current house is worth around £170k with £80k remaining on the mortgage.
Im looking to move closer to work as i am currently commuting 100 miles per day. So i spend roughly £100 a week on petrol, so i could 1/2 that amount easily.

The house that i have found and like i would hope to be able to get for £170k.

I dont want to sell my current house, and i know i could get £550 per month rent for it. I am currently working in france until after christmas so i can't go and see the mortgage adviser so thats why i am asking on here for some advice before hand.

I earn roughly £30000 per year. Can anybody advise if i would be able to borrow enough to put my current house on a buy to let and get a new residential mortgage on the new house. What amount of deposit would i require etc.

any help would be great.

kind regards

rob

kingstreet

Many lenders want rental cover of 125% of the monthly mortgage interest, assuming a rate of about 6% per annum.

£550 per month rent equates to a mortgage of only £88,000. This will limit your onward purchase, as the amount of deposit you can raise from your current home is restricted.

£550 per month is a gross yield of only 3.88% on a property worth £170,000. Ask an ARLA registered letting agent for a rental income assessment to see if the prospects are better than you think.

If not, sell and move on...

r66bby

ok thanks for the quick reply

Thrugelmir

Selling your existing property makes far more financial sense. If you've no capital other than the equity in the property. Leveraging with debt multiples the downside risk as much as it may offer better returns. Your existing equity will enable you to obtain a far better interest rate on the new property. Buy a BTL when you've saved some cash.