How does remortgaging work on a rental property?

reddyman

Hi All,

Im new to the buy to let business and am looking to purchase another property for rental.

I'm looking for some advice on how to release equity on a current property.

I bought a house a year ago for 300k.

I have a mortgage for 135k. I put up 165k cash into the property.

Another property has come onto the market which I am interested in. It cost 360k.

How do I go about releasing equity in the 1st property and using it to get a mortgage to buy the 2nd property?

Will I be able to get another mortgage based on the above figures?

Thanks.

getmore4less

A remortgage will depend on what a lender will give you based on income from the property

What deal have you now any ERC's

What sort of rent do you get off the property.

What will this new one rent for.

dimbo61

This is complex and you should be seeing your accountant for advice.
Most BTL lenders require you to have at least 25% deposit so £75K on your £300K property.
Now the rent needs to be 125% of the mortgage costs each month.
We dont know what you have signed up to with your current lender so best to speak to them first.

Thrugelmir

reddyman wrote: »

I bought a house a year ago for 300k.

I have a mortgage for 135k. I put up 165k cash into the property.

Another property has come onto the market which I am interested in. It cost 360k.

Current value of property?

How much equity do are you looking to release?

brit1234

reddyman wrote: »

Hi All,

Im new to the buy to let business and am looking to purchase another property for rental.

I'm looking for some advice on how to release equity on a current property.

I bought a house a year ago for 300k.

I have a mortgage for 135k. I put up 165k cash into the property.

Another property has come onto the market which I am interested in. It cost 360k.

How do I go about releasing equity in the 1st property and using it to get a mortgage to buy the 2nd property?

Will I be able to get another mortgage based on the above figures?

Thanks.

Most buy to let mortgages will require 25% deposits.

So you will need to retain £75K in original and need £90K for the new one deposit. So total £165K in total.

However with all the prices falls your equity is being wiped out now in both properties. So you will be really messed up for remortgaging, not wise at all.