WWYD Mortgage/rent advice

[shakey1500]

I'm 41 and work P/T 8 hours a week, dh is 48 working full time.

At present we own our house outright, worth about £130k. If we rented it out we could acheive £600 pcm. We've just had an offer accepted to buy a house for £172k.

We have an appointment with a mortgage advisor but it's not till 26th Sept and I would like some opinions/advice.

We have 2 options. Sell our house for £130k and get a £42k mortgage. Or remortgage ours (for say £100k) to buy the other property (plus a 42k mortgage) and put the rental income towards the mortgage payments

WWYD? To be perfectly honest I am not clued up at all on buy to let/repayment/interest only, it confuddles me

I know that, mortgage wise we could only borrow over 17 -ish- years because of dh age. We both have very small pensions. Our ideal scenario would be, upon retirement, downsize, buy a cheapy 2 up 2 down to live in through the winter and spend the summers in Europe (renting as we go) also to have a bit aside for ds uni fees (if he chooses to go etc).

Has anyone any advice, pointers? No problems getting a mortgage and can't foresee any problems in renting our current property out. Thanks in advance.

Well the rental Market is very buoyant just now which is in your favour as are interest rates so you could find good, low rate fixed BTL mortgage deal. If you can I would try and keep 2 as it could come in handy incomewise for your longer term plans to have £600 a month coming in when 17 years down the line you may also own property 2 by then.

Financially it would make far more sense to aim to have two properties paid off by the time you retire than one, and if the rental income would mean your standard of living needn't drop to achieve it, so much the better. Your alternative is to pay as much as possible into a pension instead, but then you wouldn't have the rental income helping you to do it.

If you go the route of renting out, you'd have to do some homework on what rental you could reasonably charge for the property and what occupancy rate you're likely to get - because that's your income. Offset against that would be the costs of being a landlord e.g. using an agency (recommended if you're new to the game) and any upgrades (to meet minimum standards for letting), maintenance or repairs - plus council tax and other fixed costs of remaining as owner. A business plan in short.

Thanks for your replies. I've also booked to speak to an independent financial advisor ahead of the appoitment with the bank (eek).

We would use an agency to manage the let as well...I just don't think we're cut out to be hands on landlords and I'd rather pay someone to do it. Already been told that there's high demand for rental in ur area, moreso because ours is a 5bed.

I am sooo not looking forward to the endless stream of communication that comes with buying!

Thanks again

shakey1500 I would also recommend giving a list of your preferred contractors to a Letting Agent should you go ahead with the rental idea because it will save you a small fortune, believe me.

Thanks for that tip Gonzo33

Financial man coming today, facts and figure a go-go.