Hi all,
I'm looking for some informal advice.
I'm looking to buy a house, but keep on the flat I bought 7 years ago and rent it out. In terms of monthly payments there's no concerns, but the mortgages I've looked at will only give me 85% of the property value as I'll have "aggregate debt" with keeping the flat as well. The flat should have gone up considerably in value, but even so is only worth about a quarter of what the house is.
But I'd really rather get 90% of the property value, so I was wondering if the following option might work :
- I use the 'new house deposit money' to completely pay off the current mortgage on the flat.
- I reapply for the mortgage on the house, presumably getting 90% LTV as I have no 'aggregate debt'
- I then take out a BTL mortgage on the flat to get back the same amount of cash that I used to pay off the original mortgage.
As you might have guessed, I'm not exactly familiar with the workings of mortgage's etc, but if anyone could advise if this might work, or any other solutions to get round what I see as a 'red tape' problem, I'd deeply appreciate it.
Thanks in advance if you can.
C.