Using rent to pay another mortgage

BikingBud

mrbonds said:

Emmia said:

mrbonds said:

Emmia said:

mrbonds said:

BikingBud said:

Please see and act upon my previous.

I am unsure who or what has stimulated you to go down this path but I really do have this sense of foreboding if you have little to no understanding about simple liabilities such as SDLT.

Just want to try and get a 2nd house since I don't have a mortgage on the current one 

Why do you want a second house and all the obligations of being a landlord? Having an agent managing it all doesn't absolve you of your legal responsibilities if they don't get it right.

Edit: why don't you just enjoy being mortgage free?

Garenteed income and thinking about the future.  

Also would like to move house since it's been 20 years 

You can move house, just sell the current one and move.

I'm not sure I want to move permanently. My house is good but id like to cash cow the rent out of a good location 🥴

I am going to break cover and shout spoof!

housebuyer143

I'm saying to the OP to just do whatever they want and then report back in the future to tell us how badly it all went 😂😂

mrbonds

As an example that being mortgage free in the house you live in isn't much of an advantage.

Can't even begin the process of getting a new house despite the rent.     

Doesn't seem much difference to people paying mortgage and those mortgage free 

saajan_12

mrbonds said:

As an example that being mortgage free in the house you live in isn't much of an advantage.

Can't even begin the process of getting a new house despite the rent.     

Doesn't seem much difference to people paying mortgage and those mortgage free 

Eh? Assuming you currently live rent free and want to let it out in order to buy a new property.. Then you have many options which put you in a much better position that someone still paying off their home
1) sell the house and buy in the new location, mortgage free (if you want to move back then sell and buy again)
2) get a BTL mortgage on the current property and use the money to buy a new residential property mortgage free. The rent pays off a mortgage secured on the same property. 
3) Rent a property in the new place, and use the rent you receive on your current property to pay your rent elsewhere. 

mrbonds

saajan_12 said:

mrbonds said:

As an example that being mortgage free in the house you live in isn't much of an advantage.

Can't even begin the process of getting a new house despite the rent.     

Doesn't seem much difference to people paying mortgage and those mortgage free 

Eh? Assuming you currently live rent free and want to let it out in order to buy a new property.. Then you have many options which put you in a much better position that someone still paying off their home
1) sell the house and buy in the new location, mortgage free (if you want to move back then sell and buy again)
2) get a BTL mortgage on the current property and use the money to buy a new residential property mortgage free. The rent pays off a mortgage secured on the same property. 
3) Rent a property in the new place, and use the rent you receive on your current property to pay your rent elsewhere. 

Number 2 is what I was asking about was it not, or similar?

kingstreet

mrbonds said:

kingstreet said:

If your only income is rent you will need two years' tax calculations and tax year overviews to be able to use the income in affordability for a residential mortgage.

A more efficient route would be to raise a let to buy mortgage on the current property and use that to purchase the residential but you will only be able to borrow the lower of 75% of the valuation; or the maximum based on affordability using the rental income.

Get broker help with this as it will be easy to make a mess of it.

As has been stated you will have second property stamp duty surcharge in England or the equivalent in Scotland/Wales.

Does the stamp duty get added to the amount of is it a one off fee upfront?

You would need to take it out of the funds you raise as it is payable by your solicitor at completion of the new residential purchase.

fireballpaul

kingstreet said:

mrbonds said:

kingstreet said:

If your only income is rent you will need two years' tax calculations and tax year overviews to be able to use the income in affordability for a residential mortgage.

A more efficient route would be to raise a let to buy mortgage on the current property and use that to purchase the residential but you will only be able to borrow the lower of 75% of the valuation; or the maximum based on affordability using the rental income.

Get broker help with this as it will be easy to make a mess of it.

As has been stated you will have second property stamp duty surcharge in England or the equivalent in Scotland/Wales.

Does the stamp duty get added to the amount of is it a one off fee upfront?

You would need to take it out of the funds you raise as it is payable by your solicitor at completion of the new residential purchase.

Thanks.