Renting my house option?

jo03gra

If I need to move but can’t get the price I need for my house to make it viable option can I change mortgage to buy to let and rent it out and still get another mortgage for another home? 

Does this impact on the amount of mortgage I could get? 

Thank you 

JM68

It might be helpful to put some more numbers on this e.g. current house value, current mortgage, rent expectation, price of onward purchase, mortgage needed, etc.

As it stands, you seem to be saying you need x price for current house to make paying y price for the onward purchase viable, which implies the difference between your current house price and the amount of additional mortgage you could borrow is less than needed?

If that is correct, I don't see how changing your current mortgage to buy-to-let would allow you to borrow more than you otherwise can now? 

jo03gra

House on market for £370k mortgage owing £150k
mortgage promise of £380k
i think would rent for £1500 month 

MEM62

jo03gra said:

If I need to move but can’t get the price I need for my house to make it viable option can I change mortgage to buy to let and rent it out and still get another mortgage for another home? 

When working the numbers, have you taken into account that, in addition to your other costs (insurances, maintenance and agency fees etc.) you will be paying tax on the rental income?  

_Penny_Dreadful

jo03gra said:

If I need to move but can’t get the price I need for my house to make it viable option can I change mortgage to buy to let and rent it out and still get another mortgage for another home? 

Does this impact on the amount of mortgage I could get? 

Thank you 

It’s possible a let to buy mortgage property would allow you to release equity from your current home.  However, bear in mind you’ll need to pay a higher rate of SDLT/LTT/LBTT depending on where in the UK you’re buying your new home as all jurisdictions will charge you more for purchasing an additional residential dwelling. 

diystarter7

jo03gra said:

If I need to move but can’t get the price I need for my house to make it viable option can I change mortgage to buy to let and rent it out and still get another mortgage for another home? 

Does this impact on the amount of mortgage I could get? 

Thank you 

Hi

The answer it could or it could not as this si subject to your fincial status and ability to pay along with any other criteria that is associated with the lending

Thnaks

ArbitraryRandom

jo03gra said:

Does this impact on the amount of mortgage I could get? 

I think what you're suggesting is called a 'let to buy' arrangement; and yes, what you're suggesting could impact the amount of mortgage you could secure. Positively or negatively. 

Ignoring things like SDLT and CGT.

At the moment you have around £220k equity to put towards your onward purchase - keeping your current property on a buy to let will reduce the amount you have as a deposit for your new property to somewhere around £128k (Assuming your BTL product is around 75% LTV).

So any additional income would have to cover the payments for the BTL, and boost your income enough that you can borrow to cover the lost equity on your new residential property, plus however much extra you actually need. 

You should also bear in mind that a lender won't assess affordability based on just an assessment of full rental value for your area; They'll consider costs like voids and maintenance as well. 

Different lenders work things out differently, so it might be worth paying for a broker to run the numbers for you.

housebuyer143

One of the requirements of let to buy is normally that your property is not on the market or SSTC. So you might find if it is on the market or it was on the market recently and they can see it on rightmove, then the lender might not agree to a buy to let mortgage.