Using BTL Equity To Buy New Home To Live In

cottlad

Sorry if i had a similar thread but last one got bogged with comments about living in a BTL rather than actual advice, and i now have more accurate figures to work with,,,,,,

Currently living in my BTL with wife and kids. I know it's not allowed but it's short term until we get something sorted elsewhere. We want to buy a house to live in and rent out the BTL property again. Problem is, only deposit i could raise without borrowing is from an endowment policy which will be around £13k plus a few bob here and there i can probably raise 15k max which will be short of the deposit needed on a house of around £220k.
Current BTL has mortgage of £85k and is valued at around £130k. Is there any way to raise or use the money from our BTL equity to buy a new home to live in.
We want to try and avoid remortgaging the BTL if at all possible as we are currently paying a V low interest rate.
My wages are our only income at present £44k

Any suggestions appreciated.

Cheers

holly_hobby

Advice was given to you by me in that thread regarding how to source your deposit, and how the free equity in your BTL may be utilised - it got bogged down with residency, as you said that you had elected not to pch the new house, but to instead remain resident in your BTL property.

cottlad wrote: »

With that said, we'd probably stay here for a year or two so would be good to know any implications and how they can be side stepped so we can keep the BTL and the low rate? Should i just keep shush or should i do something like rent the property to the wife? Is that even possible?

Ok, answering this thread, you can't use a charge on the BTL itself as collateral for the new house, the deposit reqd for that would be in a monetary format - so the only option would be to actually (and as discussed a length in my response to your original thread)release equity via either a further advance or a BTL remortgage (albeit max BTL LTV circa 80%, unless the 85% guys have re-entered the market, with rental income being supportive of the loan).

You still have the residence issues re your residing (as primary residence) of a unit that is under a btl mortgage.

Hope this helps

Holly