New mortgage & buy to let....

[mrpbailey]

Hi all, I'm After some info regarding numbers & options on property.

Here's the situation:
Current home I bought for 105k, worth approx same now. I owe something like 88k on the mortgage.
I would like to move house, and have seen a couple of properties in the 250k range.
Ideally I'd like to keep my current property and rent out. I believe as a buy to let I'm looking at a max. 75% LTV?
What minimum % deposit do I need to purchase the new house, if I'm keeping the current one? 10, 15, 20?

what I'm trying to get is a general round figure of how much of my cash I need to put in to get into the new house whilst keeping & renting the current one?

Thanks for any advice

Paul

[Sarnie]

It's a Let-to-Buy mortgage that you need. LTV will need to be 75% or less so you will need to reduce the balance to £78,750 if the property is still worth £105k. On that balance you would need to be receiving £430pm+ in rent.

Deposit for the new place will need to be a minimum 10% as you can't get on the 5% HTB scheme if you own another property. The deposit could be more if you buy a new build, especially a flat.

So, you probably need about £35k-£37k all in to cover deposits, stamp duty, Solicitors and any mortgage fees etc.

[Stevemr]

Agreed re Let to buy.

There are mortgages at 95% available on second hand properties.

There are mortgages available under MIBS MIG scheme at 95% on newbuild houses where you can have property in the background.

Will all depend on income, credit scoring etc.

[mrpbailey]

Thanks, some good advice there, especially regarding the let to buy. I was working on a cost of 37k so good to know I'm in the right ballpark as this is the amount I'm most likely to put in. I think the current property would rent for 450-500 pm.
Would you recommend doing this? Or say, sell the current property and purchase somewhere else in a year or 2 with a lower LTV? Other issue is houses in my area aren't exactly selling quickly, and rental market is a lot more popular.

[Stevemr]

Plenty of people becoming landlords like this.

Just do your sums very carefully, allow for letting agent fees, voids when property empty, council tax when property empty (some councils charge it) buildings insurance, you need a landlords policy, and maintenance costs.

Dont make the mistake of thinking 450 rent is 450 to pay mortgage.

Also do be prepared for some hassle, ie phone call to say tap dripping at 9.00 at night etc!

Best advice of all though if you do it is to get rent insurance either through letting agent or with buildings insurance, I use L and G, covers rent after 1 month if tenant stops paying, and legal costs of getting rid of them!

[Stevemr]

The ultimate landlord guide on here is useful:-

http://www.tmwdirect.co.uk/literature

[mrpbailey]

Thanks Steve for the advice, will have a look through the guides on that link cheers.