Mortgage help! BTL or sell?

[Dale 1]

Hi, have been and viewed a property this evening which is valued at £265.000, has already had a offer placed which was not full asking price. We would like to keep our house to rent out and borrow money against it to buy new property, but what are our chances? Currently have house valued at £180.000, outstanding mortgage is £37.000 monthly repayments are £280pm, would rent out for £600-£650pm would this be viable or would we be better off selling. Any help appreciated.

[GT03ROB]

Why do you want to keep it to rent out? On paper you are not getting much rental return?

[Sarnie]

Dale 1 said:

Hi, have been and viewed a property this evening which is valued at £265.000, has already had a offer placed which was not full asking price. We would like to keep our house to rent out and borrow money against it to buy new property, but what are our chances? Currently have house valued at £180.000, outstanding mortgage is £37.000 monthly repayments are £280pm, would rent out for £600-£650pm would this be viable or would we be better off selling. Any help appreciated.

It's viable, depending on;

a) How much you want out of your property or;
b) How quickly you could sell your property and how much for?

You'll need a LTB mortgage and based on a £650 rental figure, the max lend is going to be circa £124k...........

[Dale 1]

Sarnie said:

It's viable, depending on;

a) How much you want out of your property or;
b) How quickly you could sell your property and how much for?

You'll need a LTB mortgage and based on a £650 rental figure, the max lend is going to be circa £124k...........

So would they take the equity out as a deposit plus lend us 120.000, sorry to sound daft but this is all new to us. We would hope to get near the asking price of £180000 if we were to sell.

[Sarnie]

Dale 1 said:

So would they take the equity out as a deposit plus lend us 120.000, sorry to sound daft but this is all new to us. We would hope to get near the asking price of £180000 if we were to sell.

The maximum lending would be circa £124k including redeeming your current mortgage balance of £38k, meaning you would have £86k towards the new property..........if your rental figure was higher, you'd be able to borrow more, up to a maximum of 75% LTV which would be £135k.............

Or you could sell and get access to all of your equity but you are then waiting for a buyer and at the mercy of being in a chain.......swings & roundabouts. Naturally the best option would be to sell the current one and buy the new one but things don't always happen in that order....

Edited by Sarnie on Wednesday 15th July 21:19

[Dale 1]

Cheers Sarnie, appreciate your help, will have to have a rethink.