Advice on second home

David_Hope

Hi all fist time posting. I currently have a property I rent out. My rent basically covers the mortgage. 10 years left on the mortgage with roughly £10k equity. Looking to buy a property with my wife and keep this for my pension. How will mortgage brokers look at this in respect of the rent payment - mortgage payment. Do you need to have more rent to mortgage percentage. Do I also need to prove I can pay both mortgages if a tenant was to move out. Do you think I should sell and use that money towards a deposit. Thanks

ACG

General rule of thumb is if the rent covers the mortgage you should be fine unless you are wanting to remortgage the property and then there are specific rental calculations, but that does not appear to be the case.

You may want to have a read up stamp duty to see if you are liable for higher rate stamp duty or not.

Have you started to declare the income on the property you rent out? If not, it may be worth looking into that as it could be quite costly.

E30M3

David_Hope wrote: »

Hi all fist time posting. I currently have a property I rent out. My rent basically covers the mortgage. 10 years left on the mortgage with roughly £10k equity. Looking to buy a property with my wife and keep this for my pension. How will mortgage brokers look at this in respect of the rent payment - mortgage payment. Do you need to have more rent to mortgage percentage. Do I also need to prove I can pay both mortgages if a tenant was to move out. Do you think I should sell and use that money towards a deposit. Thanks

Normally for a rental property you need a LTV of at least 75%
Is it the rental home that has £10k equity? If so I doubt it's worth less than £30k so you're not within the limits.
Interest only mortgages are also common for rental properties, that would greatly improve your affordability options...