Rental Mortgage and Residential Mortgage

mane1034

I have a joint mortgage with my wife. I have 55K mortgage outstanding. Current property price is 140K....

Just wondering if below is possible:

- Apply for new rental mortgage and put current property on rent (on joint mortgage) with 25% deposit.

- Use remaining equity and buy a 2/3 bed house with 20% deposit on residential mortgage

The maximum mortgage I can get is 140K

My concerns are would I be able to get two mortgages at the same time or should I go for rental mortgage first and then once flat is on rent and then I go for residential mortgage...

Also my other half is not working so how it will impact the rental income. Do I need to divide the rental income for tax purposes....

Thanks

audigex

First things to consider

1) If worst comes to worst, can you pay the mortgage + bills on both properties indefinitely (just in case you can't sell one or the other)

2) Will a lender agree? I appreciate this is kind of your question.

3) Can you get a guaranteed rental income for the property, covering at least the mortgage?

Personally I don't intend to buy a second property until I can comfortably afford to maintain payments on both, or until one is paid off.

It's possible, but you may struggle unless you can find a lender who agrees you can afford both. You will need to pay tax on the rental income.

With a current 40% LTV, you should be able to get an excellent interest rate. Could you step up your payments now, overpay heavily and then get the current house paid off faster?

Looking at your potential maximum mortgage, I assume your and your wife's joint income is around £30k? (ie 1/4.5th of 140k). With an outstanding amount of £55k, I doubt a lender would be willing to lend you enough.

amnblog

Yes you can do this, it is commonplace.


Use a broker or you will get it wrong.