Re-mortgaging to buy to let

soapstar88

Hi,

Pleased to say I have just bought my first property! Now comes the tricky bit....

My aim is to live in this property for a short length of time (perhaps 2 years) and move on to buying another house. However I fully intend on keeping my first property and renting it (£900+ per month achievable), this bit is making me worry at what options I have to do this.

I plan on taking out a 85% ltv mortgage (£165,750 on 195k) fixed for 2 years (2.93%) on this first property. Now say two years on my property is worth 15k more and I am still paying my 85% mortgage what options do I have in terms of re-mortgaging to a buy to let and extracting enough equity to then use for another property? Do I simply re-mortgage at the new value (210k)?

This takes me on to my savings which will obviously go towards my next property plus the equity taken from the first. Would it benefit me overpaying on this first mortgage, reducing the term and interest OR using this money to go towards a deposit for a second house?

I hope this all makes sense! Thanks very much for any help.

Foxy-Stoat_3

If you want to change to a BTL mortgage in the future, then your LTV wants to be around 75% so you won't be able to draw much if any equity out and hope that the property value increases and your capital repayments chip away at the capital so that you have 25% equity.

Get saving and good luck.

dimbo61

5% yield on £210,000 property before other costs !
Landlord Insurance, Gas and Electric safety checks, Letting Agents fees, etc also coming out of profit.
Rich in No time

soapstar88

dimbo61 wrote: »

5% yield on £210,000 property before other costs !
Landlord Insurance, Gas and Electric safety checks, Letting Agents fees, etc also coming out of profit.
Rich in No time

Very helpful thanks