Sell House or Buy To Let Before Moving to New House

The_Palmist

Typhoon2000 wrote: »

Definately see a broker. Get a BTL on the first property and new mortgage on the new place. Doesn’t sound like you need to raise cash on the BTL so you can effectively claim 175% of the interest on the BTL against tax this year dropping to 100% in 4 years; including the interest paid on you new residential mortgage as well the BTL, up to the value of the BTL property.
So even tough you only have £74k on the BTL you would claim £155k ( assuming the property is valued at that) worth of interest against tax as you are borrowing to buy your second property.

Nationwide and their BTL subsidiary The Mortgage works have a product just for your scenario but a primer will give you other options.

Interest on the BTL will be in the region of £140 a month, so on your salary any void period should not be too taxing ( especially as you can claim tax relief on that so more like £80 a month after 4 years)

Thank you. When I called the bank, they advised similarly saying they cannot consider BTL till I have actually got tenants in and got rental income coming in. So for now the current outgoing will be considered as a debt for any new application. This is ok as long as my low ball offer or thereabouts work. Come to think of it, this actually helps me not make grave mistakes and end up in difficult financial situation in future.

The_Palmist

Thrugelmir wrote: »

Unless you obtain a guarateed income stream from the property then no. Build some more equity/savings first.

I remember you answering my questions many years ago when I purchased this property, thanks again and yes the bank said exactly the same.

The_Palmist

dimbo61 wrote: »

KiMost if not all BTL mortgages are only available via a mortgage broker.
You need a " business plan "
Which is why I come back to a broker.
What sort of rent could you hope to achieve from renting the property ?
As you own the property in joint names you can change ownership to tenants in common so your wife owns say 90% and you 10%
Good for tax reasons.
However you are looking for a second mortgage ( with a good deposit )
Extra stamp duty to be paid
Do the figures stack up ?
Do you make a profit from renting out your old home.
Are you better off selling and putting down a big deposit or taking an offset mortgage.
Being a Landlord is a pain in the b u m at times.

Thanks Dimbo, I own solely and since Mrs is currently on career break it is highly unlikely she will get any mortgage on her own so paying higher SDLT seems unavoidable. I am hoping the sellers see this too. Guess all depends on who is else is there offering to buy.

Typhoon2000

The_Palmist wrote: »

Thank you. When I called the bank, they advised similarly saying they cannot consider BTL till I have actually got tenants in and got rental income coming in. So for now the current outgoing will be considered as a debt for any new application. This is ok as long as my low ball offer or thereabouts work. Come to think of it, this actually helps me not make grave mistakes and end up in difficult financial situation in future.

That’s why I suggest try a product specially designed for those in your position. Getting a Let o buy mortgage and a residential mortgage at the same time. They have to complete on the same day. Outgoing for the new BTL mortgage are not consider for the residential.

The_Palmist

Typhoon2000 wrote: »

That’s why I suggest try a product specially designed for those in your position. Getting a Let o buy mortgage and a residential mortgage at the same time. They have to complete on the same day. Outgoing for the new BTL mortgage are not consider for the residential.

Thank you, I will check that option. However the BTL LTB rates are going to be considerably higher.