Raise Capital from rental property to support main house move

thereevester

I own a property in my name only and have a mortgage on it. My wife also owns a property in her name which was gifted to her by her father last year and is owned outright. This is rented out.

We want to move house but keep my wife's property. Can we raise some income from her property by getting a buy-to-let (?) mortgage which will be covered each month by the rental income.

The idea is that the money raised from my wife's mortgage will go to our new house. At the same time, we will sell my house and I will get a new mortgage for the new house too.

Is this feasible or can anyone see any complications?

foxy-stoat

Speak to a broker, I am sure this is possible.

kingstreet

Yes. It's possible.

If you plan to buy the new property alone with a gift from your wife be careful with the purchase mortgage as many lenders have an issue with someone contributing to the deposit and living in the property when they aren't party to the mortgage/ownership.

Jet

Also remember that the new mortgage can't be a tax deductible expense for the let property.

Thrugelmir

thereevester wrote: »

Can we raise some income from her property by getting a buy-to-let (?) mortgage which will be covered each month by the rental income.

Is the net after tax income generated sufficient to repay the capital borrowed?

amnblog

This is a relatively common way of raising funds for a purchase.

Things can get tricky however, if you do not use an experienced mortgage broker.

Mortgage_Adviser

As long as in lender's eyes buy to let mortgage is 'affordable' based on their stress testing see no reason why this can not be done.
Done plenty of those.

heston2014

We are currently going through a similar process, living in house which we are looking to rent out to buy a second home.
Definitely speak to a broker as we found that 'Let to Buy' are a bit complex and there are certain types of properties that lenders would not consider. We are remortgaging to raise funds from our property but it has 'decked access' where the front door is on a communal balcony/walkway. Consequently, this has limited lenders that consider such but our broker has managed to find lenders and we have submitted our application, awaiting outcome. Rates are slightly higher but there are lenders that do 'let to buys', however, quite limited.

Goodluck!