Advice on financing deposit on new house

by Readers Question

16:07 PM, 23rd August 2017
About A year ago

Advice on financing deposit on new house

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Advice on financing deposit on new house

My partner and I are looking at moving house. Currently we own two flats which we rent out as well as the property we live in and what we would like to do is to keep hold of our current property and rent that out.

We would need around £70k deposit for our new house, I was wondering what would be the best way to fund this whilst retaining our current residence. Would we be able to get a further advance on our residential mortgage? Are there any other options for financing available to us? I would be open to selling one or both of the flats in order to keep hold of our current residential property.

Also, what would be the Stamp duty implications of purchasing the new house? Obviously we would be living in it and it would be our main residence, so would the 3% stamp duty rate for additional properties be applied on the new purchase, or could it be retrospectively be applied to our current residence as that in effect will be the second property? The house is in both of our names at present, both of the rental properties are solely in my name.

Any advice welcome, thanks in advance.

Dave

Home
Purchase Price: £150k
Approx current value: £210k – £220k
Outstanding mortgage amount: £98k

Rental property 1
Purchase Price: £80k
Approx current value: £100k
Outstanding mortgage amount: £60k
Further Advance:£17k

Rental Property 2
Purchase Price: £92k
Approx current value: £100k
Outstanding mortgage amount: £75k



Comments

Neil Patterson

16:15 PM, 23rd August 2017
About A year ago

Hi Dave,

Disclaimer: Only a fully qualified and FCA regulated broker/IFA is allowed to give you advice especially when it involves your main residence. You would also need to have completed a full Fact Find.

General discussion though:

It looks like you do not have the equity in your two buy to lets to raise any deposit without great cost for a small amount.

Therefore the obvious answer would be Let to Buy of your existing main residence eg convert it to a BTL at the same time you purchase your new main residence.

However you will pay the 2nd home 3% additional Stamp Duty surcharge on your new purchase unless you sell what was the actual old main residence within three years. Selling one of the others does not count unfortunately.

See >> https://www.property118.com/hmrc-refunds-127m-stamp-duty-surcharge/


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