Want to buy a property to rent

Marcus_Norton

Hi all, long story short from May this year we will be mortgage free (yay) I am 51 and my wife is 47. Our property that we live in has a market value of £200k whats the cheapest way to raise £1000k for the rental property ? Is it possible to remortgage with an interest only mortgage? or is there another way.....we have no savings as such 

davidmcn

Marcus_Norton said:

we have no savings as such 

You probably want to do something about that before you try starting a lettings business.

Edi81

You’ll struggle to get a £1m mortgage!
why do you want to get into rentals? With all the tax changes it’s not as lucrative as it was 15 or so years ago. 

Marcus_Norton

Edi81 said:

You’ll struggle to get a £1m mortgage !

Probably will for a £1m. I meant £100K 

Marcus_Norton

I just want to use the equity in the house to work for us....

K_S

Marcus_Norton said:

Hi all, long story short from May this year we will be mortgage free (yay) I am 51 and my wife is 47. Our property that we live in has a market value of £200k whats the cheapest way to raise £1000k for the rental property ? Is it possible to remortgage with an interest only mortgage? or is there another way.....we have no savings as such 

@marcus_norton Interest-only for a house of that value is very unlikely. Assuming you have some earned income to support a capital repayment mortgage, with the right lender it should be fairly straightforward to remortgage to 50% LTV to release cash for the purpose of a BTL purchase. 

dimbo61

Most BTL mortgages like residential mortgages tend to work at certain LTV levels IE 60% LTV or 75% LTV.
You maybe able to get a repayment Mortgage for your residential property of 60/75% to purchase the BTL property.

pramsay13

The easiest way of doing it would be to borrow against your house.
To get a BTL mortage of £100,000 you will need to have at least £25,000 deposit. 
You will need to check if it's possible to borrow against your house to buy another property, some mortgage providers are stricter than others.
You will then need to do your sums and check what you will be repaying on your own house, and on your new BTL mortgage.
Given a property value of £100,000 what is the expected income?
Will you manage it yourself? Can you cope with empty periods, non-payers, trashed property?
A better way of doing it would be to save up for a deposit for the BTL property. You could put what you have been paying on your own mortgage into a savings account and save up the £25,000 or more that way.