Remortgage BTL for another purchase - 1 or 2 applications?

Mrs_Z

Question for the fellow forum members...

We currently have 1 BTL property which is virtually mortgage free (only a nominal amount outstanding). (Flat 1)

We now have an option to buy another flat (Flat 2) in the block but would need to raise both deposit and mortgage for this.

If I was to remortgage Flat 1 to the tune of 50% (for the deposit) and then apply for a mortgage for the rest - and they were with the same mortgage company; for example the Mortgage Works - can it be done as a single application or would it be 2 separate applications? If the latter, would I have to do the remortgage first and wait until the money is received, then apply for the mortgage?

kingstreet

Two separate applications and you can run them concurrently so they both complete at the same time.

Be careful, one lender might not want to lend on two properties in the same block if they will both be owned by the same person.

Mrs_Z

kingstreet wrote: »

Be careful, one lender might not want to lend on two properties in the same block if they will both be owned by the same person.

Thank you Kingstreet. Why would 1 lender not want to lend on 2 properties in the same block for 1 person? Is this a case of 'putting all your eggs in the same basket?'

kingstreet

Possible over-exposure. Lenders will typically only lend on 25% of the property on a new development for fear of over-exposure in a narrow location.

TMW;-

The Mortgage Works will consider its overall exposure by applicant, geographical area and development when assessing applications. The maximum number of securities that can be considered per development is:-

• 1-3 units: 1 unit
• 4-50 units: 25%, rounded down to the nearest unit
• 51-80 units: 12 units
• More than 80 units: 15%, rounded down to the nearest unit.

These exposure limits are per applicant and include securities mortgaged to other lenders.

See section 9;-

http://www.themortgageworks.co.uk/includes/pdf/T32_v84.pdf

Mrs_Z

Interesting. The block is not a new build - actually it is an old Victorian building converted into 5 flats. That was careless use of terminology from my part, apologies.

The existing BTL is on my sole name only. Hmmm.. 25% of 5 is 1.25.

If the application for the mortgage was to be made in joint names (me & husband) would that help?

That would mean 1 application on my name (for remortgage, ie deposit) and 2nd application in joint names for the rest.

kingstreet

TBH I suggest you have your broker look at this for you and perhaps have them speak to their TMW/Nationwide BDM.