mortgage/equity

Drillsalter

I want to buy to rent 2 properties.
I want to buy one of the properties outright- if possible and purchase a second on a mortgage.

I am short on the full 20% deposit for second property which is required for a mortgage buy to rent. Should I take some equity from the outright purchase? or take out one very small mortgage on the first and use the remaining capital as the deposit for the second? I would require a mortgage/equity of appx £10/15k from the first property to put toward the deposit for a second.

Any advice would be grateful.

Senior_Paper_Monitor

Taking an expensive (80% LTV) mortgage on one and going unencumbered on the other seems (quick mental arithmetic rather than detailed analysis - as limited information available on OP's circumstances/requirements) a more expensive option than going c 40% on each when lowest market rates would apply.

AnotherJoe

I want to buy one of the properties outright- if possible and purchase a second on a mortgage.
======

Why? Whats your reasoning here?
As said two smaller mortgages each at best possible % would seem to be a better bet.

Drillsalter

It is myself and my partner buying the two properties. We have moved into a tied house. I have sold MY property which has given me the cash to purchase a buy to rent. My partner would like to buy to rent too. He however might be short of the full deposit.

I could take a small mortgage and lend him the capital required

I could take equity out of the property lending him the amount

I could take a second small mortgage and become a joint property holder with him on the second property.

Any thoughts and advice welcomed.

AnotherJoe

So you aren't buying two properties then , just one?

Your partner will have to declare the source of any deposit he provides should you be planning to subsidise him. You'd then have to provide a statement saying that was a gift without reservation eg if you ever fell out he's be able to keep that.

Thrugelmir

If you are living in a tied house then you are not a homeowner. This will restrict your options when it comes to a BTL.