BTL query

vik1491

Hi. My father and I wish to take out a btl mortgage however we do not have enough cash for a deposit. We do own a house which has an average price of 270k in our region and the mortgage repayment just finished in november. Could somebody please advise me on the best way to finance the btl.

Thanks

herbiesjp

Well you could raise a mortgage of the first property, in order to put down a deposit on the BTL

How much will the BTL cost?

vik1491

We dont have a specific house in mind yet, but we are looking to spend 150-200k

vik1491

herbiesjp wrote:

Well you could raise a mortgage of the first property, in order to put down a deposit on the BTL

How much will the BTL cost?

Is it not possible for the lender to lend the entire amount of the new property (150-200k) based on the value of our current property (270k). This would be favouable for two reasons:
1. Eliminates the need for two mortgages - raising a mortgage on the first property (as you specified) and the BTL mortgage
2. Low LTV ratio hence hopefully we get a mortgage with a lower interest rate

MickKnipfler

Also, check taxation. I think you get tax relief on the mortgage interest if it's taken out to finance the BTL purchase. I don't think it necessarily has to be actually on the BTL property though

Conrad

Vik

I used to own a few B2Ls, but the aim with investing is always 'buy low sell high', not buy high..........

Your Dad might say - 'property always goes up in the long run' -

That statement is often made by those with no understanding of what investing is all about

I dont want to bore you but think about this - why is it that all the wealthy merchant Banks are'nt into B2L? Lots of them invest in cheap real estate in places like Germany, but not the UK now, mmmmmmmmmmmm

Conrad

Vik

I used to own a few B2Ls, but the aim with investing is always 'buy low sell high', not buy high..........

Your Dad might say - 'property always goes up in the long run' -

That statement is often made by those with no understanding of what investing is all about

I dont want to bore you but think about this - why is it that all the wealthy merchant Banks are'nt into B2L? Lots of them invest in cheap real estate in places like Germany, but not the UK now, mmmmmmmmmmmm

vik1491

Conrad wrote:

Vik

I used to own a few B2Ls, but the aim with investing is always 'buy low sell high', not buy high..........

Your Dad might say - 'property always goes up in the long run' -

That statement is often made by those with no understanding of what investing is all about

I dont want to bore you but think about this - why is it that all the wealthy merchant Banks are'nt into B2L? Lots of them invest in cheap real estate in places like Germany, but not the UK now, mmmmmmmmmmmm

Conrad

In the future I am planning to invest in property abroad. But currently I am a complete newbie to the game and think I will benefit from the knowledge I gain regarding a BTL in UK.

tidyfinance

Dunstonh, Conrad, and any other financial whizzes.
Please try to point us in the right direction.

We plan to buy property abroad.

We have placed our rented uk flat on the market.

We would need to use the capital earned in the flat to fund foreign property.

Our problem is that we have seen a re-sale penthouse that ticks all the boxes, but as is Murphys law, may miss the boat if we can't raise the funds.
Now the flat might well sell very quicky, but it may not.
So....we basically need to raise funds and wondered if anyone has used the equity in their current abode to finance a project abroad. I hope I'm making sense here.
What are our best options in raising this short term capital?
I know that we could take out a foreign mortgage, which we may need to do, but the uk mortgage would be a cheaper option (lower interest rate), and it's easier to govern this end.
If the flat sells in weeks, then happy days, if not, then this 'additional mortgage' money would have to be used.
Please advise as to the best option.
Many thanks in advance.

herbiesjp

It is very straight forward indded to raise funds from your current property - provided you have enough income to support the mortgage amount and any other debts you may have.

What is your property value? Is it unencumbered?

How much do you need to raise to buy the property abroad?

What is your income?

tidyfinance

Hi,
our property is worth £300K. Were looking to raise £50-60K, with £200K equity in the property.
I'm sure the bank would lend it. But would they lend it for the purpose of property abroad? Or could we tell porkies and state that it was for home improvements??!! heaven forbid.
I'm just really cautious on things like this and tend to go for all the negatives - much to the wifes total dismay. We are probably going to miss out on a penthouse if I can't get my head around this within the next 24 hours. Nothing ventured, nothing gained I know.
It's like I've said on other forums, the hardest step is the first one, especially where non-established markets like Morocco are concerned.