is this possible and manageable or a mad idea?
Discussion
Right I have seen a house i want to buy which is up for £175k however problem is mine wont be going on market til next week. So it might take ages to sell, does the below sound like a reasonable option? or is it too risky?
My circumstances - I have a mega secure job salary approx £42 k, i have no credit at all other than mortgage and usual household bills. If i am cautious as it stands i can sometimes bank £900 to £1000 savings per 4 weeks after all my usual outgoings. I also have savings which would allow me to put a 10% deposit on the house i am interested in.
My current house - A 3 bed semi which i estimate to be worth realistically £125k (not valued yet but based on others in area). I owe approx £37k on a mortgage on this house so i estimate conservatively £85k in equity. Mortgage is £230 a month.
So the plan would be this, i could rent out my current house giving me approx £200 a month profit after mortgage etc paid. I could then get a mortgage of approx £160k on the new house which would be paid from my wages subsidised by the profit from renting out my own house. This would be done until current house sold then equity would be used to reduce mortgage balance on new house.
Now I am quite a risk adverse person but does this sound feasible? from a personal point of view and from a banking point of view? I would hate to miss out on this house!
basically i would be looking at 2 mortgages one of 37k and one of approx £160k.
My circumstances - I have a mega secure job salary approx £42 k, i have no credit at all other than mortgage and usual household bills. If i am cautious as it stands i can sometimes bank £900 to £1000 savings per 4 weeks after all my usual outgoings. I also have savings which would allow me to put a 10% deposit on the house i am interested in.
My current house - A 3 bed semi which i estimate to be worth realistically £125k (not valued yet but based on others in area). I owe approx £37k on a mortgage on this house so i estimate conservatively £85k in equity. Mortgage is £230 a month.
So the plan would be this, i could rent out my current house giving me approx £200 a month profit after mortgage etc paid. I could then get a mortgage of approx £160k on the new house which would be paid from my wages subsidised by the profit from renting out my own house. This would be done until current house sold then equity would be used to reduce mortgage balance on new house.
Now I am quite a risk adverse person but does this sound feasible? from a personal point of view and from a banking point of view? I would hate to miss out on this house!
basically i would be looking at 2 mortgages one of 37k and one of approx £160k.
Simpo Two said:
Possibly, but:
1) There is no such thing as a secure job - especially now.
2) Interest rates are at a 300-year low and can only go up.
If interest rates double or go back to 15% (remember you're planning ahead 25 years), how do your figures look then?
I am a police officer, its as secure as you will get.1) There is no such thing as a secure job - especially now.
2) Interest rates are at a 300-year low and can only go up.
If interest rates double or go back to 15% (remember you're planning ahead 25 years), how do your figures look then?
What happens if your house isn't rented out for a couple of months? We'd considered doing something similar recently - renting our house out and then renting my mums house off her which is in a slightly better area but if our house lay vacant for any length of time we couldn't afford to pay the rent to my mum and our mortgage.
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