Mortgage on a house bought with cash.

gwernybwch

Thrugelmir wrote: »

Lender 1 may decide only to release money with conditions attached. Whereby the money will only be released to a solicitor for the purpose of purchasing property 2 if the vendor injects capital themselves i.e. a cash deposit.

Isn't the simple solution instead of doing the both transactions at the same time but to just (re)mortgage the residential property and then use the amount received from the remortgage to be used as the deposit for the BTL property?
When or if Lender 1 on the residential mortgage asks the reason for the (re)mortgage, the applicant can put any reason they want i.e. new car, holiday, as the applicant can't guarantee that the amount received from the remortgage would be for capital raising.

The_J

No lender will expect to see a deposit raised from cash. Capital raising on your property to fund the purchase of an onward property is seen as acceptable by all lenders.

RenovationMan

gwernybwch wrote: »

Isn't the simple solution instead of doing the both transactions at the same time but to just (re)mortgage the residential property and then use the amount received from the remortgage to be used as the deposit for the BTL property?
When or if Lender 1 on the residential mortgage asks the reason for the (re)mortgage, the applicant can put any reason they want i.e. new car, holiday, as the applicant can't guarantee that the amount received from the remortgage would be for capital raising.

This is the position I was leading thrugelmir to. You have to take it one step at a time with him or he won't understand. He's too high up on his soapbox to hear.

Step 1. Establish that the OP could get a mortgage from any lender he cares to approach. Even with the current tighter mortgage lending restrictions, if they stop lending to people with a 50% or 25% LTV then we might as well all give up. Even Thrugelmir would have to acknowledge this - though begrudgingly.

Step 2. Establish that the OP now has a low LTV mortgage and a substantial amount of cash in the bank from his equity release. This is a given. It's no difference from any of us who have mortgages and savings. Perhaps Thrugelmir might try and argue that people should have no savings until they are mortgage free?

Step 3. Establish that the OP could get a BTL mortgage from any lender he cares to approach, given that he would be putting down a 25% or 50% deposit.

The trouble is that Thrugelmir can't give direct advice to people because he is too busy with his financial prejudices, and he can't get off his soapbox. What he needs to do is stop preaching, or at least come clean and say that he is against BTL for philosophical reasons. At least that would be honest. :cool:

getmore4less

If you plan to use the place you will need to look at this a bit more carefully.

BTL usualy don't allow this kind of thing.

2nd home residential and rent a room also would not apply unless you made it your main home.


BTW it does not matter where you raise the money to get tax relief on the interest just get it a s cheap as possible.

it is a common misconceptions that the debt has to be on the let property.