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17-05-2011, 10:14 PM
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Use House as Deposit
Odd situation. I'm a first time buyer, been saving for a deposit for 15 years, but no eventually have a well paid job. I can get a mortgage on a 300-400k property, and have saved 70 k as a deposit. What Im wondering, could I buy a small flat for 70k without a mortgage, then I get a rental income going forward, but use the 70k equity in the property as the deposit against a 300-400k house?
If my logic makes sense, will a bank accept the deeds to a property as a deposit? Comment appreciated. Rob 
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07-06-2011, 11:24 AM
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Re: Use House as Deposit
Rob,
not really in short - some lenders used to offer 'cross security' deals but these are now restricted to private banks who would be looking for much more equity from you. it may be an idea to stretch your deposit on the purchase (90% mortgages just about exist, albeit they are expensive) and keep some back for a buy to let (you may get 80% on this side, again quite difficult to find and they are expensive) On balance, i would pump all your cash into your main residence and then ask for a further advance or remortgage in 2-3 years time and start your buy to let empire then!
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