UK Landlord Forum / Life

Hello,
Am i making good business sense ?
I have a 3 bed house almost morgage free (my residence) and i'd like to move.
What i'd like to know is can i remorgage this house to say 2/3rds of its value and use the funds to buy another house to move into then rent out my original house.
I would also be adding funds towards the purchase of the new residence.
Im thinking this way i get to move morgage free at my new residence and the new tenant pays the morgage on the old house.

Yea i know my spell aint all that but i hope you get the gist

Thank you

You can do this.

You should ensure that you have a mortgage that allows you to rent, this will normally be a BTL mortgage.

In many way I think you may be better to sell you house, buy a new investment with a BTL mortgage, buy your own house.

I say this as then you can buy a house specifically for renting out, your house may not be ideal.

You can always mortgage your new home house as well, and provided you can demonstrate that the money secured is used to add to your BTL property purchase, claim the interest on that one as well.

You would also need to change your name on this forum.

Thank you for reply boboff,

I can't see why my residence won't be ideal for renting and i'd like to keep it but also move home to a different location.

If i morgage upto 70% of the property i live in then ad 30% cash savings to make up the balance i will own another property (my new residence) outright.
The property i move out of can then be let, This is the property that will hve greater rental value.

Say i just bought  a new residence on a morgage and let out my current residence, because there will be no morgage on the let property won't i have to pay more tax and therefor have less profit?

And yes my new name will become two house depicting the number of property i let.......lol (well i hope so), lets see how it goes.

Consider this very simple example...

Two properties - both with repayment mortgages of £100,000, both with an interest rate of 3% - one is your residential home and one is a buy-to-let property. You are paying £620 per month to each - about £250 per month of that is interest. You come into £50,000... where is it best to place it? On the residential mortgage. You'll reduce your interest paid each month immediately by almost £130... if you keep the same payments you'll just pay it off that much quicker. You still get tax relief on the £250 per month interest on your BTL property. If you'd placed it on the BTL mortgage, you'd then reduce the amount of tax relief you're able to claim. It is exactly what you have highlighted. However... from your numerous questions on various topics... I would be tempted to advise getting more experience of being a Landlord before you jump much further in.

I see what you re saying but im starting out as a landlord a little late in life so time is essential here.
I'm looking at one rented property to keep which will provide a pension top up and another to sell in fifteen years to give me with a lump sum.

We all know how wrong plans can go but i intend to put every penny i can get my hands on into it......if it all goes bad then i'll end up in a bed sit but i won't be thinking later in life why didn't i do.....

Do you ever look back and think why didn't i do .......when i was younger?

Fair enough - as long as you're doing it with your eyes open. Just be extra careful about your Tenant referencing and maybe you won't end up with a nightmare situation. A smooth ride in the Landlord business is what we all hope for, right?

Quote from: Hippogriff on July 11, 2014, 10:01:24 AM
Fair enough - as long as you're doing it with your eyes open. Just be extra careful about your Tenant referencing and maybe you won't end up with a nightmare situation. A smooth ride in the Landlord business is what we all hope for, right?
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Here here.