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Remortgage owned home for potential second property/Buy to let.
Anynamethatworks
Posts: 3 Newbie
Good morning,
I've trawled the forum and various websites trying to find an answer to my potentially niche question without luck. I'm wondering if anyone can help or offer sources that may be able to assist with the following.
We have just paid the final payment on our mortgage and so now own our home outright. As we live within our means, we are looking to utilise the money we used to pay towards the mortgage for something else that may benefit us or our children for the future. Our first thought was a Buy to let property. The more we thought about it the more it makes sense but we want to ensure we complete our due diligence first as it can be a minefield from what I've read so far.
A couple of questions that spring to mind first:
Are we able to get a mortgage on our current owned home to buy a second property to rent out? We believe our current owned home is worth roughly £300,000 and the potential second property to rent out is £200,000. Rather than get a buy to let mortgage and have to save up a deposit to be able to get a reasonable LTV mortgage, can we mortgage our owned home to release the £200,000 to buy the second property outright without the need for a deposit? We don't have a deposit saved so if this is possible, it could save us a lot of time having to save.
Also, My wife and I currently both work, (i am in full time work and my wife works part time). I'm presuming this would be an additional income that would need to be taxed as appropriate?
Any help would be greatly appreciated.
Thank you.
I've trawled the forum and various websites trying to find an answer to my potentially niche question without luck. I'm wondering if anyone can help or offer sources that may be able to assist with the following.
We have just paid the final payment on our mortgage and so now own our home outright. As we live within our means, we are looking to utilise the money we used to pay towards the mortgage for something else that may benefit us or our children for the future. Our first thought was a Buy to let property. The more we thought about it the more it makes sense but we want to ensure we complete our due diligence first as it can be a minefield from what I've read so far.
A couple of questions that spring to mind first:
Are we able to get a mortgage on our current owned home to buy a second property to rent out? We believe our current owned home is worth roughly £300,000 and the potential second property to rent out is £200,000. Rather than get a buy to let mortgage and have to save up a deposit to be able to get a reasonable LTV mortgage, can we mortgage our owned home to release the £200,000 to buy the second property outright without the need for a deposit? We don't have a deposit saved so if this is possible, it could save us a lot of time having to save.
Also, My wife and I currently both work, (i am in full time work and my wife works part time). I'm presuming this would be an additional income that would need to be taxed as appropriate?
Any help would be greatly appreciated.
Thank you.
0
Comments
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There is no problem with what you are looking to do.
Yes, excess rent after allowable expenses is taxable.
Get professional mortgage and tax advice before proceeding.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.1 -
Thank you for your quick response. Are their any independent advisors worth contacting. Presuming at a cost or are there free advisors?
Thank you.0 -
No fee, commission-only, fee-charging, commission-rebating.
There are all types of mortgage broker. Establish options from friends' and relatives' recommendations.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.1 -
Thank you very much for your help.0
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You need to do your homework !
Do the figures stack up ?
What will you get for £200K ?
House or Flat ?
How much will it rent out for ?
Are you an experienced landlord ?
Yield ? Tenant type ? Expecteded rent with examples from local lettings agents ?
Fully self managed or using Letting agents ?
Do you earn enough to get a £200K mortgage and they will only offer a residential mortgage on your home to buy a BTL property with cash !
It is possible and I would consider an offset mortgage0
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