Owning your own home

work out exactly what you would save over the next 6 months (not long till the renovations will be finished), and offset that against the costs of switch for such a short time as well. even though there isn't an early payment fee, there are still costs associated with registering the mortgage that you need to factor in.

Have you spoken to the existing mortgage holder and expressed your displeasure with the new rate? Its worth seeing if they will be flexible on their rate before remortgaging - if they figure out they'll lose you as a customer, they may be 'happy' to reduce the rate rather than have no income from you at all.

They'll drop to 3.79%, but fixed for 2 years.

Your idea sounds sensible to me assuming that alongside the fee free transfer there's no early redemption penalties.
My remortgage just came through. 75% LTV at 5.48%. No upfront fees but some nasty early repayments penalties - 3, 2 and 1% for the first 3 years respectively. The curse of the BTL mortgage.

How does BTL work?
Could I remortgage my flat with a BTL of more than the outstanding mortgage, then use the extra as a deposit for a second mortgage to buy a house for me to live in?

As it stands it looks like I could rent my place out for twice my monthly mortgage repayments, so if there is a way of capitalising on that, rather than selling up, that might be a good idea.

However, it means that we don't hit the 60% loan to value ratio that we needed for the 3.49% fixed rate we were after.

I'm thinking of going to a base rate tracker at 3.79% whilst I tile the bathroom etc, then get the place revalued and remortgage again when we know we can get a 250K valuation- which should be mid-next year.

Is there a reason you want to stick with HSBC? I have found them to have consistently higher rates and lower ltvs than the other high street lenders.

Co-op have a 2 year fix at 3.29 for 75% LTV, or 2.99 with a £1k fee. You have to pay the valuation charge etc...as a guide we switched to a no-fee co op deal earlier this year and I think the costs were about £270.

How does BTL work?
Could I remortgage my flat with a BTL of more than the outstanding mortgage, then use the extra as a deposit for a second mortgage to buy a house for me to live in?

As it stands it looks like I could rent my place out for twice my monthly mortgage repayments, so if there is a way of capitalising on that, rather than selling up, that might be a good idea.

Hard one to answer as it's all down to numbers.

First off, BTL mortgages are usually at a higher rate than a regular mortgage so straight away your monthly mortgage payment will increase. Having said that some lenders will allow you to let you mortgaged property without switching the loan to a BTL product.

In broad terms you can mortgage up to around 80% of the value of your flat provided the likely rental income covers 125% of your mortgage payments. This means if your payments come to £8,000 a year you need to be pulling in a rent of £10,000.

Without knowing your particular circumstances, let's say you have a flat worth £200,000 and you currently have an outstanding mortgage of £100,000. You could remortgage it at 75% of it's worth, borrowing £150,000 which gives you £50,000 to play with as deposit for somewhere else. You could choose to stay put and use the cash to buy a BTL property or move on and rent yours out.

You also need to decide if it's actually worth renting your place out. A good starting point is the rental yield which wants to be better than 5%. This is calculated by annual rent / property value x 100. You also need to look at likely maintenance costs of the property which is likely to get a harder than usual life with tenants. Also factor in other expenses. Agent's fees, void periods, insurance, ground rent, service charges, etc.

So it seems like things have really slowed down with our purchasing progress.

What can I do to hurry the agent/ solicitor up a bit.

We were told originally 6-8 weeks. Our broker said we could expect to be in by Christmas. I haven't heard anything from the Solicitor in a week. Is it time to start getting assertive with them?

At this point, it would be well worth making a daily phone call to the solicitor, and ask them explanations as to why you are behind schedule. Make same phone calls to agents, and when either of them tells you that the problem is that the seller hasn't done something, ignore their insistence that you can't speak to the seller directly, and chat with the seller. Knowing exactly how many weeks ago the seller did the thing they're claiming isn't yet done is a powerful tool :)

Exchanged yesterday and paid all outstanding fees to complete on Thursday.

Important things;

It has a great hilly commute (Forest Hill to Waterloo).
It has a garage for bikes.
It has a spare room for making music in.
It has a great kitchen for drinking wine, listening to the radio and cooking in.
It has a South facing garden for growing things and sitting in with a view over South London.
It's awesome.

Wahey!

Nice one dooks!!!

Ok so I've had an email from solicitors today. They're still waiting on the local search but have told me I can progress regardless. I'd rather wait though.

Also the seller needs to provide indemnity insurance for one of the missing deeds.

So it looks unlikely I'll exchange before Christmas but at least now I know where we stand.

Exchanged yesterday and paid all outstanding fees to complete on Thursday.

Important things;

It has a great hilly commute (Forest Hill to Waterloo).
It has a garage for bikes.
It has a spare room for making music in.
It has a great kitchen for drinking wine, listening to the radio and cooking in.
It has a South facing garden for growing things and sitting in with a view over South London.
It's awesome.
Wahey!

... But you have to live near Dammit

Every cloud...

Oh wait.

Whereabouts Dooks?

If I was in a position right now, I would seriously consider the below.

http://www.kfh.co.uk/residential/flats-for-sale/london-crystal-palace-se19-queen-mary-road/2107455/

Still waiting for bloody solicitors.

Me too. Lets have a completion race!

Eyup. We did infact complete with minimal last minute fuss the day after my last post.

Have been frantically decorating ever since. Will now be annoying neighbour Dammit in the DIY thread. All set to move in this week. Goodluck homebuyers!

Me too. Lets have a completion race!

Can I put the money on you?

Which option is smarter?

1. Overpay current mortgage on 1br until complete and then save deposit for 2br place?
   
2. Stop overpaying current mortgage to build deposit for 2br place and 'own' both?
   
3. Eat neighbours and have their place for free?
   
   

Basically, I'd like a bigger place but wonder if it's smarter to pay one off totally before renting 1br out or get another loan and rent the 1br out whilst still paying off both?

WVM is the chap to answer this I suspect.

I think that there is a tax advantage to having as large a loan as possible on the rental property, from dimly remembered conversations with a friend years ago- so don't listen to me.

White Tax Van Man?

He's a man of many fingers, and many pies I believe.

Impossible to answer in one hit but some food for thought.

Overpaying your current mortgage is probably the best bang for buck for spare cash (assuming you can't find a better interest rate for savings compared to that on your mortgage).

You can probably borrow up to 80% of the value of your current flat assuming the likely rental income covers 125% of the interest payments on that loan.

If your equity is better than say 40% of the value of your flat you can remortgage to free up the equity and you've pretty much got your deposit for the next home straight away.

Someone else takes over paying your mortgage on flat 1.

Assuming you are paying tax and will be declaring the income from the rental property to the taxman, you may want to keep the income to a minimum. Depending on your tax bracket, profit from the rent could be as much as halved by the time you pay tax on it which hurts like hell! So, although you will pay a higher interest rate on a BTL mortgage, by the time tax has been taken into account, it probably is better, as Dammit suggests, to max out on the mortgage on the rental property. It's also worth buying in joint names as the profits can be shared as can future capital gains.

It's also worth investigating whether your current 1 bed flat is the best choice for renting. This means looking at stuff like yield i.e. annual rental income as a % of the flat's value.

usual caveats

repped^. good man yourself