Juggling BTL mortgages

slopemaster

Hello. I'm looking for some help to think through something I'm planning for next year. My first and most important Q is this - when I come to find a mortgage broker, will a 'general' one be OK, or should I be looking for BTL specialist?

The actual scenario is this.
We own 4 properties, one we live in (X) and 3 we let (A, B and C).
All unencumbered except a small 22k interest-only loan on one of them.
The plan is to sell the most expensive one A (low rental yield) and buy 3 or 4 cheaper properties.

But, assuming the market is still rising next year, we don't want to sell first and then start looking to buy, We want to buy first and then sell. So this means borrowing money.
We would mortgage houses B and C for say 75% of their value, and use this money as say 40% deposits on houses D, E and F. All these loans would be interest only. The borrowing on houses B, C, D, E and F would equate roughly to the value of house A, which we could then sell at our leisure. (Having already more than replaced the income from it).

I'm just not sure if it's feasible to get all these loans given our relatively low income. Neither of us is employed. OH has a relatively small income from self employment; the rest of our income comes from rent. The joint nett income we declare for tax is about £29000 - we have evidence of this going back 3 or 4 years now.

Each house would easily meet the criterion of rent being 125% of mortgage interest.
BUT Borrowing on houses B and C would already be about 10 times our joint annual income. If we then borrowed to buy D, E and F, total borrowing would be more than 20 times current income - or about 10 times the new annual income once D, E and F were rented out.
Is this impossible?

silvercar

BTL mortgages are generally assessed on the rental income, rather than your employed income. I would think you need a broker experienced in BTL.

You may find that you need to use different lenders as one may feel too exposed to take on them all.

Thrugelmir

slopemaster wrote: »

Each house would easily meet the criterion of rent being 125% of mortgage interest.

At 6% -7% notional interest rates as opposed to actual ?

Have you made any allowance for a tax liability on disposal of the investment property?

slopemaster

Thrugelmir wrote: »

At 6% -7% notional interest rates as opposed to actual ?

I think so - but it's a good point; I'll check my figures.

Thrugelmir wrote: »

Have you made any allowance for a tax liability on disposal of the investment property?

Tax liability will be reduced by fact its ex-PPR.
But, another good point - I need to recalculate this.