Remortgaging my home

joequigley

My wife and I own our own home outright, it's worth about £500k. We also own another property outright that's worth about £90k and we rent this property out for £495pcm.

My wife's parents are now ill and we would like to move back to the area (it's 200 miles from our main home) for a few years.We don't want to sell our main home, it's near London and if we sold it we'd never be able to buy back as the prices are rising fairly quickly.

We thought about renting near my wife's family but there's not much available so we thought it might be best to buy a place for a few years.

The trouble is I'm retired and my wife retires shortly, at the end of summer. All the mortgage companies we've talked to only offer income based mortgages.

We're looking to borrow about half of what our home is worth, then in a few years time we'll sell it and return to our main home.

We can rent out or home for about £16k per year so could easily afford a mortgage of £250k.

Any ideas of what we can do?

Regards,
Joe Quigley

kingstreet

In most cases, £16k on £250k won't be enough to satisfy lender rental cover calculations (try 5.5%/125%).

There are lenders who don't routinely ask for evidence of income on a LTB/BTL remortgage but they may look at your ages and wonder how you would cover void periods, so your personal income may come into play.

You may find it useful to speak to an independent broker as trying to do this direct on the high street will prove pointless.

AnotherJoe

I think I'd look harder for rental.
Your rent in London should more than cover your rent 200 miles away, especially if you downsize a bit, you have no expenses of buying and selling, you arent locked into a mortgage, there is no extra 3% SDLT, no CGT and minimal maintenance or other unexpected costs.

Are there rental retirement properties available you could look at?

amnblog

As KS says, you need to consult a mortgage broker, but consider tailoring your lending requirement down closer to £200,000 for your budget in the new area.


Joe may be on a more solid footing with the rent out and rent elsewhere line.