Remortgage BTL to release cash?

catterlen

Hi all,
I want to remortgage my BTL, which I used to live in until I relocated with my job 18months ago. The BTL is in my own name, but I bought a house jointly with my partner 18 months ago for 100%(10% personal loan etc) with Northern Rock. I didn't sell the house I owned as we both had well paid jobs and we could use it as baackup if we needed. Maybe not the best in hindsight?
The BTL stands at £83k, houses were selling when I moved for around £120-130k on same street. I wanted to remortgage for prob £115k to put some money into my joint house. Not sure I can do this in terms of tax, or if I can even borrow this much, as houses now selling for only £130k on the same street. Just looking for any advice people can give on this either being feasible, or if there is an option I haven't thought about as I am worried we may not be able to remortgage our joint house with the current situation or get enough from the BTL. Any advice welcome! I will see a mortgage broker too, just wanted some opinions or if anyone has been through similar?

herbiesjp

The most you could look at on a BTL is 85%

However, the rates are very high still

To get better rates on a BTL basis you would need a lower LTV i.e 75% or 80%

Whichever LTV level you look at though, the mortgage can only be agreed on the basis of the rental income the property provides. So this will the is ultimately dictate what kind of mortgage amount you could look at

What rental income do you currently get?

catterlen

Rental income currently around £650, but could be more as there is one room free at the moment

herbiesjp

Lenders do not like bedsit or room let type arrangememts on their BTL products.

So any rental assessment would be based on what the property could demand in the current market. This rental assessment would be done by the surveyor, at the same time as the survey.

Your best bet would be to discuss the situation with a whole of market adviser, in order to best advise what potnetial mortgage amount you could get along with the associated rates

catterlen

So I would be best letting as an assured shorthold tenancy and leasing the whole house? It is basically a better than normal student house in a well known part of a city where there are loads of students, so the rental market is good. I will try calling a mortgage advisor ASAP, thanks for your help!

herbiesjp

There are some lenders that are fine with student lets -however they may not be the ones offering you the better rates, or the ones offering the mortgage amount you want.

It will have to be a case of prioritising what is most importnat to you, and then using that to help you decide which options you prefer to go for