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What would you do? BTL? Sell?


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Hi everyone,

I've found myself in a bit of a predicament with an impending divorce and trying to figure the best way to navigate out of this situation. Any advice on the following details would be much appreciated.

I have a property jointly owned with my ex. We have amicably decided she should get her share of equity that we've made plus any contribution to previous renos costs. This comes to approx. 60k.

My issue is how best to raise the £60k. The easiest option would be to sell up and start again. However I've put a huge amount of work into renos and improvements over the last 18 months so would love to keep the place if possible. It's in a great area of town where values are rising and the rental market is strong so it should be a good investment.

Current value £430k. Current resi mortgage £260k. Potential BTL interest only mortgage £320k. Monthly rental value approx. £1,400.

I'm also a contractor with my own limited company. If hugely beneficial I could look into buying the place through the ltd Co. (Not sure about the mechanics of this at the moment though).

Looking forward to any ideas what you'd do.

Cheers

 

 

 

 

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Hi Gav2424,

 

Looking at the figures you’ve provided I’d personally sell up. A house worth £430k will rarely make a good rental. 

I doubt you’d be able to move this onto a BTL mortgage product because of the stress tests. 

Stress testing at 125% you’d need a rent of £1679.00 per month to meet criteria.

 

Also the mortgage payments on a £322,500 loan at 5% would be £1343.00. So if mortgage rates were to rise to 5% this would wipe out nearly all of the profits. 

 

Hope this helps 

 

Dan 

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