Can I rent out my current flat and buy somewhere bigger?
Posted on 13 January 2013 by Sam
I am the outright owner of a flat in London and I am interested in getting a mortgage for a buy-to-let property nearby. Also I am self employed earning around £50k a year. Can I use my current flat (which I live in) as collateral to get a bigger mortgage, or somehow release equity from this flat in order to fund a mortgage? Many thanks for any advice, Sam
Your situation is commonly known as "Let To Buy" and many lenders will look at this type of case. You can apply for a new mortgage on your existing flat to capital raise funds for the purchase of your new main residence. The amount the lender will usually lend is based on the proposed amount of rent that you will be receiving and the loan to value (LTV) you are looking to achieve.
You can then apply for your new main residence mortgage based on your self employed income, and the rest of lenders standard criteria.
Without knowing the rest of the figures involved, I can't be anymore specific, however if you'd like to discuss your enquiry in more detail, then please let me know and I'll arrange for one of our consultants to contact you.
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