Mortgage for development property

Bounderby

I have a residential mortgage on my current home at around 60% LTV, about 2x salary.
I am interested in purchasing a second property to renovate and sell on, for which I would have around 20% deposit, but preferably would put down less. I could afford the interest repayments on the second loan and the cost of renovation. Purchase price 90-100k.

How best to secure funding for the other 80%? I'm on a fixed rate and don't want to remortgage the existing property, nor would it raise the total sum required anyway. I think I'd be able to raise a BTL on the new property from criteria I've read, but don't intend to let it and if there are cheaper % options it would make more sense.

Many thanks

ACG

There are a couple of options:
You could get development finance,
A bridging loan,
A secured loan/second mortgage against your residential.

All depends on the figures involved, affordability, how long it will take to do up and sell etc etc. I would recommend sitting down with a broker as a lot of the options (and providers) for this sort of finance deal primarily with brokers.

holly_hobby

Stictly speaking development finance (ie pch to renovate and sell on as a business enterprise for gain ), is in reality commercial funding (and any gain on sale will be declared and subject to income tax, not CGT).

Obtaining a BTL mge with as you say, no intention of letting but to refurb and sell on (and assuming its in a mortgageable and lettable condition), would essentially be mortgage fraud - so tread carefully with that one.

ACG has given you a few options to work with.

Hope this helps

Holly