buying a second property after remortgaging

jayroc2k

Do you think this could work?

I have a one bed flat and would like to remortgage and take some money out (value after renovation is up about 25%). I will keep the same LTV and take out the excess cash.

After about 6-12mths, I would then apply to the bank to let out the flat (my bank allows on an annual basis) and then team up with my partner to buy a bigger flat using the equity taken out.

How will a new lender view the situation given the rent covers more that 1.25 the mortgage on the first flat and the original lender has agreed to a short let period.

The reason is to sell the first flat at a later date, possibly a year later as house prices stabilise and increase.

Why all this? well, I do not want to loose my first flat until my relationship has stayed the test of time.

bigadaj

You haven't posted any numbers which might help, patticulalry if you haven't much equity currently.

However from your description you seem to think you can borrow on he basis of the works to be done which will up your ltv, but it doesn't work like that. You need to do the works and then revalue an dpotentially remortgage. If you borrow now you need the equity ther to allow you to borrow in the first place.

Post current value and mortgage and this might become clearer.

jayroc2k

current flat has about 37% equity. I would like to remortgage to a 15% ltv and take out the excess cash as i did spend quite a bit (complete renovation) to get it to its current value

bigadaj

Actual numbers would help a lot, you say you want to remortgage to a 15% ltv, but must mean 85%.

Given your current borrowing I would be tempted to try and remortgage to between 60% and 75% ltv, as this will release equity whilst achieving a level of borrowing that doesn't exceed a normal buy to let maximum.