Who will allow buy to let without a residential mortgage already?

turtleneck

I am looking to re-mortgage my flat as buy to let. I want to release equity from it with which to put down on a second flat.

However my current mortgage provider does not allow this, they say I must already have a residential mortgage (where I live) before I can have a buy to let.

I was planning to stay at a friends while looking for a second property, so I really need to find a mortgage company who will give me a BTL mortgage without needing a residential one as well.

If anyone knows any companies who will do this please let me know!

kingstreet

You're looking for a let to buy remortgage product.

You may find this quicker using a whole market broker as the market for such products is still broker centred.

amnblog

KS is right.

This situation is more complex than you may imagine.

Thrugelmir

You may encounter issues with the release of equity for the purposes of raising a deposit. Leveraging amplifies the risk considerably. A factor which isn't allowed for in standard lending rates.

turtleneck

I currently have about 50% equity in my flat and I want to reduce that to 25%, that would release enough to put down on a second flat. I didn't think it would be so difficult!

kingstreet

It won't. A 75% LTB is about the max. Some lenders look at your personal income and you post-remortgage living costs, but others take only the rental income into account.

You'll need the rent to be at least 125% of the monthly mortgage interest, assuming a rate of perhaps 6% per annum.

silvercar

Could you:

Buy your new home at the same time, transfer your existing mortgage to it and then arrange a straight forward BTL on the existing property?

Raise the extra funds on the mortgage now whilst you are living in the property then ask for consent to let on it while you move out. Then get a residential mortgage on a new place and when the consent (to let) expires get a BTL remortgage product?

turtleneck

silvercar they are good suggestions, which raise the following points for me:

1. can i get equity from my current mortgage by any other way than re-mortgaging? i ask because if i re-mortgage as residential then i am tied in again for 2 years and this wont allow me to change to BTL. i am unable to get consent to let because i have no intention of re-occupying the property after 2 years as i intend to live in the new one.

2. i need the extra funds first and the amount of funds i can get depends on the valuation of my current property, that is why i'd rather change to buy to let first and know how much money i am able to obtain. this will then tell me how much i can afford to pay for property 2.