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Buying second property
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Retirement_planner
Posts: 11 Forumite
We have our own mortgage free home value 340k. We have viewed a property in our area which will be perfect for retirement 250k but not for the next few years as waiting for the last dependant to fly the nest. Due to location it will make a perfect holiday let. Do we raise the money on our current home or do we need a buy to let mortgage? We know we can only get mortgage for length of time we intend to remain in work. As we have some savings, would paying off the car loan make us more attractive to lenders these days, or better off paying off interest free credit card? Or reducing the amount we want to borrow? We intend to sell the family home in approx 5-7 years.
Thanks for any advice
Thanks for any advice
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Comments
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Where is the deposit coming from?I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0
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Retirement_planner wrote: »As we have some savings, would paying off the car loan make us more attractive to lenders these days, or better off paying off interest free credit card?
Your financial circumstances will determine the amount that you'll be able to borrow.
You do realise that the stamp duty is going to be £10k or thereabouts on the purchase.0 -
Deposit for the property or paying off loans from savings0
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Yes thanks we know the stamp duty Grrr!0
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Not sure how old you are but many lenders wont lend past 70. This may make a £250k mortgage unaffordable if over a short period. If you go for a BTL mortgage on the new property you will need to put down a 20% deposit usually and they are more expensive than residential mortgages.I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
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You will need a holiday let mortgage. A buy to let mortgage doesn't allow short term lets.
The good news is a holiday let mortgage will give you a term up until you are 80, as the lending is based on the income the holiday let brings in.
Look at Cumberland and Principality. Leeds do them, but they have to be established holiday lets unless they meet the buy to let criteria on rental income
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I have done the same. I plan to sell my main home in 3-5 years time and pay off my holiday let mortgage.0
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