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Release Equity for BTL - chances??
Options
MinMoz
Posts: 156 Forumite
Going to look into this further in new year and will probably seek advise but was looking for feedback to assist my pondering.
My dad bought me out of my old house (gave me £40k) to allow me to move around 5 years ago as moved into a doer-upper. Mortgage on old house is tracking base + .29% so makes it a decent investment and was able to get permission to let. Currently let to a great tenant.
5 year fix up in May and now looking to buy my dad out by releasing equity in my newer house. What are the chances of a lender agreeing to it and me still being able to get a 5 year fix at 3%? Figures for current house:
House value - £230k
Outstanding in May - £107k but would reduce amount outstanding to £90k from our savings
Release - £50k to pay my dad giving a new mortgage of £140k.
Am I dreaming thinking a lender would agree to this? All figures for the BTL stack up well so no concerns over that.
My dad bought me out of my old house (gave me £40k) to allow me to move around 5 years ago as moved into a doer-upper. Mortgage on old house is tracking base + .29% so makes it a decent investment and was able to get permission to let. Currently let to a great tenant.
5 year fix up in May and now looking to buy my dad out by releasing equity in my newer house. What are the chances of a lender agreeing to it and me still being able to get a 5 year fix at 3%? Figures for current house:
House value - £230k
Outstanding in May - £107k but would reduce amount outstanding to £90k from our savings
Release - £50k to pay my dad giving a new mortgage of £140k.
Am I dreaming thinking a lender would agree to this? All figures for the BTL stack up well so no concerns over that.
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Comments
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A 60% BTL remortgage, as long as rent is 125% of monthly mortgage interest assuming say, 6% per annum should be fine.
On £140k, that means you need £875 pm rent.I am a mortgage broker. 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. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Thanks Kingstreet. Think I have mislead you in my ramblings though.
I am looking to leave the mortgage on the rented property as is as it is currently at 0.79% - instead I want to release £50k from the mortgage on my home to buy the equity from the rented property back from my father.0 -
In which case, you need the income to support the higher mortgage and a lender willing to accept the purpose of loan.
A whole market broker may be your best bet for this, to ensure you don't have problems with the new lender "taxing" you the cost of the let property/mortgage.I am a mortgage broker. 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. Please do not send PMs asking for one-to-one-advice, or representation.0 -
So who's name is the house and mortgage in? your's or your dads?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.0
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Both the mortgage and house are in both names. Years ago when I was taking it on myself we took this approach rather than having my dad as guarantor.
My preference would be to change it to just being in my name if we did this but think the Woolwich would want to end my tracker mortgage which would mean it's not anywhere near as good an investment.
Definitely will contact a broker but just wanted to see of it was a possibility before doing so. Thanks for the help.0
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