Buying 2nd property, what are my chances?
Discussion
Hi, I currently have a house valued between £200-220k which i have a mortgage of £132k on.
I earn £38k per year but with overtime am pulling in over £43000 for the past five years.
My partner earns around £10k.
I have a car loan of £450 but this will finish in December and could finish at any point from now if i chose to finish it.
The first home will be rented out and I believe I will get around £800-900/month and the mortgage costs me £617/ month. I have a fee to change this mortgage of approx £6k which I believe i will need to do to change it to a buy to let mortgage. i want to remain the sole owner of this property.
I want to buy another property With my partner at a price of £180k but do not have any funds to add a deposit apart from the value in first home.
What are my chances of achieving this?
I can easily afford the payments on both properties even if the first property is sat empty but I need to get the mortgage first and understand it will probably look like a significant stretch of finances to a bank.
Any help greatly appreciated.
I earn £38k per year but with overtime am pulling in over £43000 for the past five years.
My partner earns around £10k.
I have a car loan of £450 but this will finish in December and could finish at any point from now if i chose to finish it.
The first home will be rented out and I believe I will get around £800-900/month and the mortgage costs me £617/ month. I have a fee to change this mortgage of approx £6k which I believe i will need to do to change it to a buy to let mortgage. i want to remain the sole owner of this property.
I want to buy another property With my partner at a price of £180k but do not have any funds to add a deposit apart from the value in first home.
What are my chances of achieving this?
I can easily afford the payments on both properties even if the first property is sat empty but I need to get the mortgage first and understand it will probably look like a significant stretch of finances to a bank.
Any help greatly appreciated.
Sorry just to add, if needed I could get a guarantor (my parents) who own their house and have significant assets both liquid and otherwise.
And this would be done with full protection of myself to retain ownership of the main property should a split occur as I’m not falling for THAT again!
And this would be done with full protection of myself to retain ownership of the main property should a split occur as I’m not falling for THAT again!
FukeLreeman said:
When is initial mortgage up?
When re-mortgaging, I'd go for a BTL with 25% down.....You can take equity out and put down 20% on new house that way.
Initial mortgage is up in 2043 unless you men the fixed part of the mortgage if so that is in 6 years time. When re-mortgaging, I'd go for a BTL with 25% down.....You can take equity out and put down 20% on new house that way.
Are you suggesting that I could rent the existing property out without changing the mortgage to a BTL mortgage as this would save me £10k in early get out clauses.
Have a chat with a mortgage advisor, most would give you some good (free) advice and what they anticipate they could arrange for you.
Are BTL mortgages means tested? I mean providing you have 25% deposit (don't quote me but remember this being a requirement) and the rental income is sufficient to cover the mortgage, will having this BTL affect your ability to get maximum amount of mortgage loan on your personal property? If that's the case then it's surely straightforward, you take the equity out of your existing property, leaving max 75% LTV for the BTL mortgage and take £18k or however much as deposit for your new place.
Sure someone far more knowledgable on these matters will be along to confirm if this is the case.
Are BTL mortgages means tested? I mean providing you have 25% deposit (don't quote me but remember this being a requirement) and the rental income is sufficient to cover the mortgage, will having this BTL affect your ability to get maximum amount of mortgage loan on your personal property? If that's the case then it's surely straightforward, you take the equity out of your existing property, leaving max 75% LTV for the BTL mortgage and take £18k or however much as deposit for your new place.
Sure someone far more knowledgable on these matters will be along to confirm if this is the case.
Sheetmaself said:
....with overtime am pulling in over £43000 for the past five years.
.....
The first home will be rented out and I believe I will get around £800-900/month
........
i want to remain the sole owner of this property.
I'm not sure exactly how it works out but your gross income would take you into the 40% tax bracket and a double whammy is the tax credit on mortgage interest is limited to 20%......
The first home will be rented out and I believe I will get around £800-900/month
........
i want to remain the sole owner of this property.
T1547 said:
Have a chat with a mortgage advisor, most would give you some good (free) advice and what they anticipate they could arrange for you.
Are BTL mortgages means tested? I mean providing you have 25% deposit (don't quote me but remember this being a requirement) and the rental income is sufficient to cover the mortgage, will having this BTL affect your ability to get maximum amount of mortgage loan on your personal property? If that's the case then it's surely straightforward, you take the equity out of your existing property, leaving max 75% LTV for the BTL mortgage and take £18k or however much as deposit for your new place.
Sure someone far more knowledgable on these matters will be along to confirm if this is the case.
This is kind of what i am hoping i can achieve, the only issue being the £10k fine takes it to only £8k deposit for the mew house unless i can get funds from somewhere. Not impossible in the future but certainly while going through the divorce it is just incase that is persued. Are BTL mortgages means tested? I mean providing you have 25% deposit (don't quote me but remember this being a requirement) and the rental income is sufficient to cover the mortgage, will having this BTL affect your ability to get maximum amount of mortgage loan on your personal property? If that's the case then it's surely straightforward, you take the equity out of your existing property, leaving max 75% LTV for the BTL mortgage and take £18k or however much as deposit for your new place.
Sure someone far more knowledgable on these matters will be along to confirm if this is the case.
Sheepshanks said:
I'm not sure exactly how it works out but your gross income would take you into the 40% tax bracket and a double whammy is the tax credit on mortgage interest is limited to 20%.
Will take some financial advice on this as my overtime can be claimed as days off i stead so this may become beneficial rather than the money, I hadn't appreciated this so thank you. My mortgage is a fixed term mortgage for 19 years with a fee should it get changed in anyway (including moving to another property) of £10k on a sliding scale but weighted so it doesn’t reduce by £1k a year. Wasn’t an issue at the time of re-issue as had been with the wife for 18 years and no sign of any issues. Obviously things have changed somewhat!
Sheetmaself said:
My mortgage is a fixed term mortgage for 19 years with a fee should it get changed in anyway (including moving to another property) of £10k on a sliding scale but weighted so it doesn’t reduce by £1k a year. Wasn’t an issue at the time of re-issue as had been with the wife for 18 years and no sign of any issues. Obviously things have changed somewhat!
No, 99% of mortgages in the U.K. are portable, I have been a prolific broker for the last 23 yrs.Look at the mortgage offer.
Who is the lender?
T1547 said:
Have a chat with a mortgage advisor, most would give you some good (free) advice and what they anticipate they could arrange for you.
Are BTL mortgages means tested? I mean providing you have 25% deposit (don't quote me but remember this being a requirement) and the rental income is sufficient to cover the mortgage, will having this BTL affect your ability to get maximum amount of mortgage loan on your personal property? If that's the case then it's surely straightforward, you take the equity out of your existing property, leaving max 75% LTV for the BTL mortgage and take £18k or however much as deposit for your new place.
Sure someone far more knowledgable on these matters will be along to confirm if this is the case.
Yes, buy to let’s are "means tested" the majority of lenders have a min income of around 25k, they also have a rental stress test so the rent has to cover the mortgage payments on a notional stress rate, often 145% of the monthly int only cost when calculated at a notiona 4.5 to 5.5% rate (not the rate you pay). Plus the min 25% deposit / equity.Are BTL mortgages means tested? I mean providing you have 25% deposit (don't quote me but remember this being a requirement) and the rental income is sufficient to cover the mortgage, will having this BTL affect your ability to get maximum amount of mortgage loan on your personal property? If that's the case then it's surely straightforward, you take the equity out of your existing property, leaving max 75% LTV for the BTL mortgage and take £18k or however much as deposit for your new place.
Sure someone far more knowledgable on these matters will be along to confirm if this is the case.
Most let to buys need a simultaneous onward purchase (virgin sometimes do not).
The stress rate means you often cannot cap raise to the full 75%
Caddyshack said:
Yes, buy to let’s are "means tested" the majority of lenders have a min income of around 25k, they also have a rental stress test so the rent has to cover the mortgage payments on a notional stress rate, often 145% of the monthly int only cost when calculated at a notiona 4.5 to 5.5% rate (not the rate you pay). Plus the min 25% deposit / equity.
Most let to buys need a simultaneous onward purchase (virgin sometimes do not).
The stress rate means you often cannot cap raise to the full 75%
Interesting additional insight, thanks. Does the existence of the BTL have any bearing on how much can be borrowed on the new (to live in) property i.e typical 4.5x income? Presuming not (providing sufficient deposit)?Most let to buys need a simultaneous onward purchase (virgin sometimes do not).
The stress rate means you often cannot cap raise to the full 75%
Caddyshack said:
No, 99% of mortgages in the U.K. are portable, I have been a prolific broker for the last 23 yrs.
Look at the mortgage offer.
Who is the lender?
Nationwide, they were very specific in making sure that we knew we couldn’t do this. I will check the paperwork but very confident I can’t Look at the mortgage offer.
Who is the lender?
Okay they definitely told us we couldn’t port it over as we were thinking of maybe moving to a flat in the city, but we had the discussion in the room between me, the ex and the mortgage person from Nationwide during which the ex and I decided to go for the 10 year fixed and commit to the existing property.
Well anyway this appears to suggest if I move my mortgage to another company I would need to pay the fee laid out but if ported over to a different property as long as I stayed with them I wouldn’t have to pay the fee.
Again though they were very clear that this wasn’t possible.
Well anyway this appears to suggest if I move my mortgage to another company I would need to pay the fee laid out but if ported over to a different property as long as I stayed with them I wouldn’t have to pay the fee.
Again though they were very clear that this wasn’t possible.
Have you asked if you can apply for permission to let on the existing mortgage? Some companies will maintain all the other conditions for you but for a small admin fee give you written permission to then let the house out. This will then affect your capability to obtain another mortgage for your next home so you need to be clear in advance about the amount you need to lend next. In terms of BTL also be aware of the costs and tax regime that will eat into the rent you receive, plus the hassle of managing a second house if you’ve not done this before.
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