Remortgaging 1 house in order to buy another

letiss7

Here is our situation:-

We have a house that we own outright (no mortgage) which we would like to rent out. We have moved out of this house and are living in a rental property at the moment.
We estimate a monthly rental value of £1400 for the house we want to rent out.
We are looking to buy another house soon which will be our main residence.

We were hoping to remortgage the house we want to rent and use that money as a deposit on the house we want to buy.

I've done some research online but am finding it difficult to understand how much we could borrow on the property we want to rent out.

I am also assuming that the plan I have outlined above is something that can be done.

We are going to see someone at the Halifax to discuss our situation next week but I was just after some opinions / insight from people who know a lot more about how mortgages work than I do before that meeting.

kingstreet

The proposition is a let to buy.

Similar to buy to let, you'll normally be able to borrow the lower of;-

75% of the value of the property

the mortgage amount calculated from rent of at least 125% of monthly mortgage interest assuming a rate of perhaps 6% per annum.

If needing a new residential mortgage, ensure you use a lender willing to ignore the property and mortgage on the let property as self-financing so you don't see your affordability reduced.

An experienced independent broker would be a better source of help on this compared with going direct to a lender. You will then ensure you get the best lender options for both sides of the equation.

letiss7

Thank you Kingstreet