Is a let to buy mortgage even possible?

loveka

Thanks for any advice.

Our house is worth £475k. It is on an interest only mortgage, but we have an endowment which, if we cashed it in and added £25k, we could use to pay off the mortgage. The rental income would be £1400 a month.

The house we want to buy is £400k (we would be relocating 250 miles away) We would have a £100k deposit. So we would need a £300k mortgage. I only earn £30k! Would anywhere lend on the basis that we could rent out our house?

We have been trying to sell, but the housing market has ground to a halt round here, so looking at alternatives as we don't want to lose the house we are looking to buy.

We also have a buy to let property which has £200k equity, and which makes a £750 a month profit after the mortgage insurance etc is paid.

Thanks for reading!

Thrugelmir

Reduce the price of the house you are selling. Price is the key.

loveka

We have reduced it, it was on for £525k. The estate agent has said people are just too scared to buy at the moment. Our house would mostly appeal to first time buyers, who are the most wary apparently.

AnotherJoe

You could try a broker to see if they know someone who will accept BTL income on top of your salary. I think its unlikely, but no harm trying.

Otherwise, sell one of your BTLs (If you sold the £200k equity house that would solve your issue) or drop the price of the £475k house lower.

Scary that a house at £475 is for FTB's, how many can afford that? !! Maybe you have hit the maximum price band for your house. Try it at £450k. There will be a price that works. I take it you're in London?

loveka

Yes, it is scary indeed! Those are the prices in the south east though. It's not the most expensive of its kind even!

loveka

Yes, it is scary indeed! Those are the prices in the south east though. It's not the most expensive of its kind even!

Typhoon2000

If you can clear your existing mortgage with the endowment, you can get a Let to buy mortgage on it based on the anticipated rental. You can use the money from that towards the deposit of your new place.
There are probably other lenders but Nationwide and their BLT arm, The Mortgage Works, do a package if you get a Let to Buy with TMW and do a simultaneous residential mortgage with Nationwide. You will need a broker.
http://www.nationwide-intermediary.co.uk/products/specialist_lending

tlc678910

Hi,
I wouldn't put yourself in a position where you need the rental income to pay your own mortgage. (Hopefully you're not - you will still have cash savings) or else void periods or non payment will be very stressful and ruin your credit rating.
Tlc

glentoran99

ah 475k house doesn't sound like its a first time buyer property

amnblog

Sounds like you need to raise extra funds on the two properties you are keeping to reduce the lending on the new home to something achievable.

It all sounds very tight.

Have you factored in the stamp duty implications of not selling the current home at this time?