Let to Buy Mortgage - Advice Please

franyjayne

Hello!

I have a flat which is worth a chunk of money and I have about 150% equity in it.

I want to buy a house with my partner and am looking to use my equity to fund the deposit on the new place. Is this possible?

Happy to chat with a mortgage advisor if someone could recommend one that would be happy to have a free consultation - we are in early conversations about how this could be possible and not ready to go ahead yet...

Cheers!

Frany

kingstreet

Yes. You remortgage the current property to raise the deposit for the onward purchase.

Usual caveats about affordability, loan to value and cost/fees such as SDLT surcharge apply on the purchase.

150%? Really?

foxy-stoat

How have you got 150% equity in the flat - what are the numbers, I am interested.

franyjayne

150%? Really? - Yep! I bought it a long time ago

Thanks so much for this.

kingstreet

The equity is what you own after any mortgage.

If the property is unencumbered (mortgage-free) the maximum is still 100%!

somethingcorporate

kingstreet wrote: »

The equity is what you own after any mortgage.

If the property is unencumbered (mortgage-free) the maximum is still 100%!

Perhaps like you used to get 120% LTV deals they have infact got 150% equity. Like 100% paid off and another 50% worth of equity in the bank? :rotfl:

kingstreet

Like the banks and fractional reserve banking?

I've got £1 here, so I can lend someone £1.50 off the back of that and make a profit?

franyjayne

So it turns out I am not wording it correctly! I owe £90k and it's worth £250k ish.

kingstreet

So your equity is £160,000 or 64% of the £250,000 value.

You have a 36% mortgage.

franyjayne

That's right. Need to release about 100k to match what my partner is putting in. Looking to buy £350-450K property. Doable?

MoneyGeoff

Stamp duty on a £450K second home will be £26,000.

Why not just sell the flat?