9:21 AM, 27th July 2022, About 2 years ago 3
Hi all, I have a question related to starting a small property business.
I own a 50% share of a house in the UK which is worth roughly £200,000. This house is currently being rented out and I receive 50% of the income per calendar month.
I am hoping to purchase another house in the region of £100,000 in the North of England and begin renting that property out; the houses I have been looking at need little to no renovation and so could be put on the market for let more or less immediately.
I have been looking at buy-to-let mortgages (BTL), and although I do not have a ‘cash deposit’ of 20-25% for the BTL mortgage (i.e. the money is not sat in my bank, it is instead in the form of the house asset), I would use the collateral in the form of the 100,000 share I have of my currently owned house. So for example, I could use £30,000 of a possible 100,000 collateral and then get a 70% BTL mortgage from the bank.
But then I was thinking it may be better to use the whole £100,000 collateral I own and buy another house outright worth the same value.
Can anyone shed light on the options I have, please? I am very new to this and trying to find my feet.
Which route is better and safer to take?
Which option would likely result in the lowest monthly repayment?
Thank you all
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