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Using Equity as deposit?

innox
innox Posts: 16 Forumite
Part of the Furniture Combo Breaker
in Mortgages & endowments
Hi All,

I am thinking of buying a second property to rent out, but I do not have a deposit as yet. I heard from a colleague I may be able to use the £25,000 equity on my current flat as a deposit.

Does anyone know if this is true/possible?

Thanks

Mark

Comments

  • MortgageMamma
    MortgageMamma Posts: 6,686 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    Yes it is possible, however you would need to remortgage your current flat to get the 25k equity in cash for your deposit on your buy to let
    I am a Mortgage Adviser

    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • JoeK_3
    JoeK_3 Posts: 1,374 Forumite
    innox wrote: »
    Hi All,

    I am thinking of buying a second property to rent out, but I do not have a deposit as yet. I heard from a colleague I may be able to use the £25,000 equity on my current flat as a deposit.

    Does anyone know if this is true/possible?

    Thanks

    Mark

    How much of your £25,000 equity do you want to release?

    As you will be looking at a remortgage and then a buy to let mortgage you should talk to a whole of market mortgage broker to get the best rates.

    JoeK
    I am an Independent Financial Adviser.
    Anything posted on this forum is for discussion purposes only. It should not be considered financial advice. Different people have different needs and what is right for one person may be different for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser who can advise you after finding out more about your situation.
  • silvercar
    silvercar Posts: 49,715 Ambassador
    Part of the Furniture 10,000 Posts Academoney Grad Name Dropper
    This is going to be the next BIG scandal. People encouraged to take their residential mortgages to higher levels to fund deposits on a BTL!

    Check that you can afford both the increase on your home mortgage and the BTL mortgage. If the rental income is not going to cover both and some to spare for other costs, you are going to be subsidising your tenant.
    I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • epz_2
    epz_2 Posts: 1,859 Forumite
    and risking the roof over his head
This discussion has been closed.
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