Advice on buying second property...

Zulew_uk

I currently own a property and have 85% equity the property value is 110k. 5his property I intend to rent out.

I am look8ng to save to buy a second property to live in at a value of 85k.
Question is how much ltv would I need to buy the secobd mortgage. Is there any other obstacles I should know of.

Thanks in advance
Lewis

alex_163163

Have you factored in the higher rate of stamp duty on the second purchase? This would be an extra £2550 you'd need to save by my reckoning, on top of any deposit, solicitors fees etc.

ReadingTim

This suggests you can get BTL mortgages of up to 85% LTV. However, as a first time landlord, you won't get above 80%, and give the low property value, you won't be taking £100k out of it, so won't be getting more than 75% LTV.

Obviously there's the extra stamp duty associated with a 2nd property. You've also got to consider void periods and factor in agency costs (if you use one) for the BTL. Probably remortgage for c.50% LTV on the BTL and use the cash as a substantial deposit for the 2nd place. Problem is that due to the low purchase price of that place, you might not need to borrow very much - possible less than the minimum mortgage amount!

kingstreet

You can get upto 95% on a residential with a let property in the background as long as the new lender considers the let self-financing.

Zulew_uk

Thanks everyone

Cakeguts

110k sounds a bit low for a good rental if you want to attract the best tenants. Have a look on Rightmove and see how many properties like this one are currently available to let. If there are a lot you will have a lot of voids and trouble finding new tenants.