Releasing Equity

alnsal1

I have a property which I rent out which has risen in price quite well. What I want to do is release the equity to put down on a new property on a BTL mortgage. Can I do this? What is involved and is it a good idea?

I do have some savings as well which I could use. Would it be wise to release all my equity in my first property to reduce the mortgage on my second property?

Can anyone help?

herbiesjp

You can do that, and many actually do.

You can either go to your current lender and see what they can offer, or see what other lenders can offer you. Remember the maximum amount you can borrow varies between 85% and some 90% lenders, but the actual loan amount is dictated by the rental income you receive, so you may not be able to go as high as these figures.

I would suggest having a word with a fee free whole of market mortgage adviser, as rental yields/coverage sometimes means the choice of lenders is restricted.

HTH

alnsal1

Thanks for the advice. This area can be a minefield to the newbie.

horace_2

>> alusal1

In your original post you state...
quote
` What I want to do is release the equity to put down on a new property on a BTL mortgage`.
unquote

Unfortunately there is no such animal as `Equity Release`.

If you opt for this avenue all you are doing is raising a `Second Mortgage` on the property.
This means that the so called `Equity` has to be repaid with interest.

There aren`t any `free lunches`.... what you are loaned has to be repaid.



horace

This post is for discussion only and must not be taken as financial advice.

h