Advice needed for 2nd property potential?

TidyGarden2020

Hi everyone. I've just signed up so be gentle.
Myself and my other half have a mortgage on our current house of about £236k, over 24 years. This isn't an issue as our income is ok. The house got purchased for £255k, but after some renovations, I reckon it could be valued at this time at £290k-£300. 
My other half has about £16k sitting in a saving account and she has spoken about her desire to on a second property and have an air bnb etc. 
Basically our fixed mortgage deal is up in about 12 months. Can i get the house re-valued and then take out a deal based on a LTV. I.e, if my mortgage is about £225k by then and the house is valued at £300, my LTV should be about 75%. 

Could I effectively remortgage and take out some equity and and make my LTV say 90% - mortgage of £270k and use the rest of the equity as additional money for second property?
Yes she could pump the £16k into the house, but she wants to start some sort of business and earn additonal from it. 

Any advice appreciated. Any ideas if the banks be happy about this?

dimbo61

This might be possible but that depends on so many factors.
Age, incomes, credit score, business plan, location and local rental market.
Do your research into the rental market nearby, speak to a mortgage broker and your accountant.

[Deleted User]

TidyGarden2020 said:

Hi everyone. I've just signed up so be gentle.
Myself and my other half have a mortgage on our current house of about £236k, over 24 years. This isn't an issue as our income is ok. The house got purchased for £255k, but after some renovations, I reckon it could be valued at this time at £290k-£300. 
My other half has about £16k sitting in a saving account and she has spoken about her desire to on a second property and have an air bnb etc. 
Basically our fixed mortgage deal is up in about 12 months. Can i get the house re-valued and then take out a deal based on a LTV. I.e, if my mortgage is about £225k by then and the house is valued at £300, my LTV should be about 75%. 

Could I effectively remortgage and take out some equity and and make my LTV say 90% - mortgage of £270k and use the rest of the equity as additional money for second property?
Yes she could pump the £16k into the house, but she wants to start some sort of business and earn additonal from it. 

Any advice appreciated. Any ideas if the banks be happy about this?

You and your partner jointly own your home so any further properties you and/or your partner buys will be subject to the higher rate of SDLT which will probably wipe out most of the £16,000 savings.  

As for remortgaging your home then yes it is possible to remortgage to withdraw equity depending you can meet affordability.  Have you put together even a high level business plan to see if it's even worthwhile to buy a second property?

AnotherJoe

Can you post the basics of her business plan.

Just showing the return over time, taking into account tax, running costs (higher on a AIRBNB),  how long to make enough profit to pay back all the SDLT (not just the extra), contingency for major expenses.

You'd be surprised how many people just think "mortgage is £500 a month,  income £1,000, therefore, no-brainer.

csgohan4

16k savings for a btl isn't alot in the grand scheme of things, risk of non paying tenant, eviction costs and repair costs are very real and she needs to have a contingent fund for this

as with any business, has she done a business plan outlining overheads and realistic income