Is this possible ?

Iron2010

My house is worth 300k. I have a 50k mortgage and just over 50k in the bank. I would like to keep my existing house to rent out and borrow about 450k for a new place. We basically plan to retire back into house our family have outgrown. Income is about 65k.

Could I do this ?

If not how much could I borrow over 30 years on a new place ?

Thanks

Iron2010

Forgot to say that the rental will be about 950 month

dimbo61

You could speak to a whole of market mortgage broker about taking out a BTL mortgage on your existing property to release some of the equity so you can put down a bigger deposit on the new property you want to buy.

Iron2010

Thanks for reply. I will do that in Jan, I just wondered if looking at properties worth 450k was feasible ?

Thrugelmir

Iron2010 wrote: »

Forgot to say that the rental will be about 950 month

What's your forecast net profit?

Thrugelmir

Iron2010 wrote: »

Thanks for reply. I will do that in Jan, I just wondered if looking at properties worth 450k was feasible ?

Even with the rental income your earnings simply aren't high enough.

Realistically you need the equity from your existing property.

Iron2010

I have access to a handyman who works for our family company so that would be fairly negligible. I would have a punt at finding tenants myself but I would say 800 is a reasonable estimate

Iron2010

I've hot no problems drawing equity from current property if that makes it feasible ?

kingstreet

Remortgage the current property to a let to buy. The rent will support a £152k mortgage.

Repay the existing mortgage, leaving you the butt-end of £100k to put towards the new purchase.

Joint £65k pa assuming no other credit or dependents will mean a max new mortgage for the purchase of around £290k over 30 years. You'll need a lender willing to ignore the let property/mortgage as self-financing.

So, your £100k remortgage residue, £50k savings and £290k borrowing power is a bit short for a £450k purchase as you'll also have fees to pay out of all that.