BTL mortgages and personal debt

cococoladebt

I am looking to remortgage a BTL on my own name to raise funds for another property I have been offered and so need to raise funds asap.

Current mortgage is £147k with a value of £380k. I am looking to re-mortgage to about £200k. Looking at the rates I am fully covered as the new repayment will be about 69% of the rent. All fine so far.

Now the problem is my credit rating is just fair. I have about 3 searches for a credit card, 1 bank account and 1 mobile contract, all from May 2012. Since then I have had no searches but my credit card debt is about £25,000.

Now the question is do brokers/lenders look at personal debt when lending on a BTL property?

Thrugelmir

cococoladebt wrote: »

Now the question is do brokers/lenders look at personal debt when lending on a BTL property?

Lenders will do so when remortgaging. The purpose of the funds will be questioned as well.

cococoladebt

Okay cool. So ideally I should bring the debt down to £15k perhaps. And of course the use of funds will be deposit for another property.

holly_hobby

Your existing debt will be considered as part of an overall credit score.

The equity to be released - purpose will have to suit - and the pch of another property shouldn't be an issue (as long as your overall BTL exposure will remain within the lenders permitted criteria).

I would also strongly consider repaying the expensive short term/rolling credit you have.

Hope this helps

Holly