Having two mortgages, renting out old house
Discussion
I've currently got my old house rented out (for £800p/m) after I moved out of the area. It's still on the same mortgage as it was when I bought it, which is an Interest only at £320 per month. Thing is I'm now looking to buy another house with my partner and wanting to work out whether to leave current place rented out or sell it - my equity is about 18% on it, and it's worth about £180k.
So....Question is, is it likely I'll be able to apply for another mortgage on top of my existing one, or are lenders likely to turn their noses up because they'll assume I'm overstretched? The rent on my house clearly more than covers the mortgage but I havent (irresponsibly perhaps) informed the mortgage lender for fear they'd try and switch me on to a less affordable b2l product.
For background, I earn circa 50k and my partner 27k. We're looking to buy somewhere up to 260k and have about 60k to put down. It's also apparent I could command another £50 per month on my rental place if needed. It let very easily within 24hrs, and in terms of return on my cash investment, I think is ok. But feel free to disagree, as I'm no property investor so yields and the like don't trip easily off my tongue...
Anyone learned in the field of finance and mortgages care to offer some opinions/advice/thoughts/insults?
So....Question is, is it likely I'll be able to apply for another mortgage on top of my existing one, or are lenders likely to turn their noses up because they'll assume I'm overstretched? The rent on my house clearly more than covers the mortgage but I havent (irresponsibly perhaps) informed the mortgage lender for fear they'd try and switch me on to a less affordable b2l product.
For background, I earn circa 50k and my partner 27k. We're looking to buy somewhere up to 260k and have about 60k to put down. It's also apparent I could command another £50 per month on my rental place if needed. It let very easily within 24hrs, and in terms of return on my cash investment, I think is ok. But feel free to disagree, as I'm no property investor so yields and the like don't trip easily off my tongue...
Anyone learned in the field of finance and mortgages care to offer some opinions/advice/thoughts/insults?
Sarnie said:
The new lender won't be interested in whether it's on a BTL product or not, just whether it's self-financing and whether it's likely to affect their risk in lending to you for the new property......
Although if you choose Woolwich / Barclays for the new mortgage and your existing mortgage is not on a BTL scheme they normally require to see confirmation that you have 'consent to let' otherwise they will not agree that it is self financing. Sarnie said:
The new lender won't be interested in whether it's on a BTL product or not, just whether it's self-financing and whether it's likely to affect their risk in lending to you for the new property....
..
Thanks, sounds like I might have a shot at getting a mortgage then...
Im concerned about informing the lender as I've technically broken their rules and don't want to be triggered into switching to a BTL product. Maybe Roth steering clear of Barclays /woolwich
Jop19 said:
Thanks, sounds like I might have a shot at getting a mortgage then.
Im concerned about informing the lender as I've technically broken their rules and don't want to be triggered into switching to a BTL product. Maybe Roth steering clear of Barclays /woolwich
It doesn't sound like there is enough equity in the property to convert it to a BTL, but you really should apply to them for Consent to Let the property...........Im concerned about informing the lender as I've technically broken their rules and don't want to be triggered into switching to a BTL product. Maybe Roth steering clear of Barclays /woolwich
Yes you have broken the rules with not telling the mortgage company and may get a slap on the wrist.
Much more importantly, have you told the buildings insurance company that its rented out, because if you havent, then you are unlikely to be insured. Furthermore, even if you have, some insurance companies will not pay out if you have not advised lender,as they will deem this fraud.
Much more importantly, have you told the buildings insurance company that its rented out, because if you havent, then you are unlikely to be insured. Furthermore, even if you have, some insurance companies will not pay out if you have not advised lender,as they will deem this fraud.
Stevemr said:
Yes you have broken the rules with not telling the mortgage company and may get a slap on the wrist.
Much more importantly, have you told the buildings insurance company that its rented out, because if you havent, then you are unlikely to be insured. Furthermore, even if you have, some insurance companies will not pay out if you have not advised lender,as they will deem this fraud.
Indeed........Much more importantly, have you told the buildings insurance company that its rented out, because if you havent, then you are unlikely to be insured. Furthermore, even if you have, some insurance companies will not pay out if you have not advised lender,as they will deem this fraud.
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