Advise on 2nd Mortgage,,

lcp03o

Hi, I was wondering if I could do the following but am not to sure how it works??

I own a flat and am looking in to moving in to another place. First thing I need to do is change my mortgage in to a buy to let mortgage. Am i right in thinking you need to have already paid 25% of your mortgage to change to a buy to let?? Then odviously rent out the flat

I am also looking in to buying a 2nd property, As its a second mortgage can I still borrow 4 x my salary?? or will less funds be available to me because I have two mortgages??

Thanks

herbiesjp

Yes you can do what you want to do.

If you are tied into a deal with your current lender, you can apply to them for consent to let - there will probably be a fee, and they may increase the interest rate. If there are no penalties, you can then shop for other BTL deals.

15% is the figure you should be looking at - although if you have more equity in the property it opens up more options.

The mortgage amount for the BTL is based not on your earned income, but on the expected rental income from the flat - do you have an idea how much this would be yet?


As long as this rent more than covers the mortgage payments, the new lender for the new property will "ignore" this commitment in the background - and so you can still get the normal income multiples available.

That's it put in simplistic terms, it is a little more involved, and you need to find the right lenders, as they all have different lending criteria