Relocation, BTL, residential... any chance?
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questionss
Posts: 322 Forumite
Currently live near London, own outright worth about £600k
1 partner is contractor with own ltd company total income circa 90k with some left in the company. Other partner has income as secretary and share holder for the company of circa 20k along with a part time job with a similar income. Job is professional and finding similar wages up north should not be an issue, there are also locum options.
Plan was to sell and move north in a few years, buying outright but an interesting option has arisen and we’re very keen, it’s 800k.
Now considering releasing 300k equity from the current house and taking out a BTL mortgage on the remainder and letting that house out. Rental should cover the mortgage and maintainance at that rate although it’s not a great % return property.
The 300k equity plus approx 170k savings would mean a residential mortgage of 400k to cover purchase, stamp duty on a 2nd home and fees etc.
The numbers work, i think, if we were buying local to us but although partner 1 would continue to work in London (part remotely part as a super commuter) partner 2 would need to find a new job. Would these work situations be considered? Income without partner 2s employment is still high.
1 partner is contractor with own ltd company total income circa 90k with some left in the company. Other partner has income as secretary and share holder for the company of circa 20k along with a part time job with a similar income. Job is professional and finding similar wages up north should not be an issue, there are also locum options.
Plan was to sell and move north in a few years, buying outright but an interesting option has arisen and we’re very keen, it’s 800k.
Now considering releasing 300k equity from the current house and taking out a BTL mortgage on the remainder and letting that house out. Rental should cover the mortgage and maintainance at that rate although it’s not a great % return property.
The 300k equity plus approx 170k savings would mean a residential mortgage of 400k to cover purchase, stamp duty on a 2nd home and fees etc.
The numbers work, i think, if we were buying local to us but although partner 1 would continue to work in London (part remotely part as a super commuter) partner 2 would need to find a new job. Would these work situations be considered? Income without partner 2s employment is still high.
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Comments
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Do the numbers work once you pay tax on the rental income? You can currently put 50% of the interest you pay on the mortgage as an expense, 25% next year and 0% after that.
You may also have to pay higher rate stamp duty on the BTL purchase.I am a Mortgage AdviserYou 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.0 -
questionss wrote: »The 300k equity plus approx 170k savings would mean a residential mortgage of 400k to cover purchase, stamp duty on a 2nd home and fees etc.
Not though equity it's debt. With no rental income. You'd need to be able to service £700k of debt along with the outgoings of 2 properties.Rental should cover the mortgage and maintainance at that rate although it’s not a great % return property.
Does the level of rental income meet lenders requirements? E.G. stressed interest rate of 5.5%. Along with the rental income being 145% of the notional interest chage.
Also remember that the net profit made on letting the property is taxable. Any capital repayments are made out of taxable income.0 -
Rental income should be about £1800/mth and the property has been rented easily by us in the last 5years it’s just not a high yielding property. Although I’ll sit down and do those stressed rate calcs etc. Well aware of the other costs involved with renting, empty periods etc.
Already accounted for higher rate stamp duty on the 2nd property. I’m pretty sure the numbers would stack up But unsure how lenders will view the relocation aspect.
We may sell the original home in a few years and get a refund on the extra stamp duty but we aren’t ready to sell it just yet and would like to move without a chain and without going into rented ourselves.0
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