Is there any way of keeping our house and buying a new one?

class2ldn

I think I pretty much know the answer because of the figures but thought I'd ask in case anyone has some ideas to help.
We are looking at moving to Gloucestershire from West sussex but I was trying to look for ways to keep our house and rent it out as it's value will probably keep rising due to its location.
We are 10 minutes drive from Gatwick airport with a 24 hour bus service to it at the end of the road, good access to the m23 and only 30 minutes from the coast.
Anyway our current mortgage is 221000 and it's currently on sale at 280-300k but hoping to get nearer the top if we do sell.
Now I know generally buy to lets need 75% and we are very close to that and I worked out that on an interest only mortgage the payments would be around £400 ish if we could get it valued at 295. The rent around here would be about 1200 for a 2 bed.
Only issue with this is it doesn't leave us with much of a deposit to buy elsewhere, any ideas on how we could get some more funds?
Ideally I'd like to hold on until we had enough equity in the house to take it out and use it for a deposit but that's not possible now as it would put us over 75% ltv and not sure if theres any lenders that do that and it would probably bump our payments up a bit.
Obviously I'm aware being a landlord is hard work and I've had a good read through the advice documentation on here which is really helpful.
We have a bit of money saved but not enough for a deposit on a new house.
In reality I guess I'm clutching at straws here but just wanted to throw it out in case anyone had any ideas to make it possible?
I've just had a look at having less equity for the buy to let and there is lenders that will go above 75% .
Just had a nose at precise and there's is coming back at 763pcm on 235k which would give us nearly 20k deposit and still works out about 175/80% on the rental figures .
Would that work?

Thanks all.

pjcox2005

I'm guessing you may be struggling, if you keep the existing one then you'll have additional stamp duty so for a £200k property that's £7.5k.


Add in legals and moving costs and you'll need over £10k plus the 10% deposit of £20k mentioned which it sounds like you don't have.


If the margin on renting is good i.e. £400 interest against £1,200 rent then have you considered asking for a consent to let so lower rate. You can then trial renting it out for a year whilst you rent somewhere in Gloucestershire which presumably will be much cheaper.


Gives the benefit of being able to be certain of the area in Gloucestershire if you're not already, and another year or so to save and improve your position in order to buy a second house.

class2ldn

That's a good idea . I did look at that as we are with nationwide but they add another 1% on our mortgage rate if you do that.
Is it possible to switch to interest only doing it this way or would that just be classed as another remortgage?
Also if it's interest only it won't be paying off the mortgage on the house so come a years time it would still be the same unless the price has gone up which it probably will but not sure it would make much difference.
Just had a look around where we want to move and 2 bed house can be rent for 695ish so quite cheap.
Also looked at compare for buy to let mortgages and the cheapest is virgin at 329 pm on an interest only.
Even better. Our current mortgage is a tracker so no ties.
I see if we fully managed it then normally it's around 10% plus vat so I think there quite a good gap between the outlays and the income provided. Need to speak to my broker and see what he thinks as it seems a good way forward especially when the rental in gloucestershire is so cheap.