Mortgage free property and wanting to take out a new mortgage

Monkeychops16 · 11 August 2016 at 11:12AM

Please could someone advise if this scenario is possible. I have been having a strange discussion with my boyfriend. We live in his property that is mortgage free. We would like to move to a bigger house and get a joint mortgage. He seems to think that the fact he owns a house outright will have some positive bearing on the new lending (as ideally he wants to keep this house and rent it out). I can't see how this would be the case-unless we sold it and put the value down as a deposit?
Any thoughts would be gratefully received-thanks

lee111s · 11 August 2016 at 12:32PM

You'll be hith with a much bigger stamp duty bill for a start as it'll be hos second property.

nkkingston · 11 August 2016 at 12:32PM

You can release equity from your current house by remortgaging it as a BTL and put that towards a deposit. You'll need to show you can afford both mortgages even when the current house is not let, though, so it may depend on income.

Pixie5740 · 11 August 2016 at 12:43PM

A let to buy mortgage would let him/you mortgage the current property up to a 75% LTV.

kingstreet · 11 August 2016 at 12:53PM

A let unencumbered property would see the rental income used to increase affordability for the residential, but I would agree with remortgaging it and using the funds raised to reduce the residential mortgage requirement and achieve a better rate.