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Mortgage for deposit?
kevin38
Posts: 6 Forumite
I have a rental property that I own outright that is valued at around £190k with a rental income of £950 p/m. The property that I live in has a mortgage of around £70k and is valued at about £390k
I want to buy another BTL property for investment and its my intention to buy another 2 investment properties later this year.
It's my understanding that BTL mortgages require around 25% deposits but all my cash is tied up in the existing rental property... Can I borrow against the existing property (with £190k equity) to raise each of the 25% deposits required to buy more BTL properties? or will I have to sell the existing property and take the £190 cash and use that as the deposits?
If I can borrow against the existing property how would I go about this, mortgage broker? Do I tell the broker that its for the deposit the buy another property?
Thank you
I want to buy another BTL property for investment and its my intention to buy another 2 investment properties later this year.
It's my understanding that BTL mortgages require around 25% deposits but all my cash is tied up in the existing rental property... Can I borrow against the existing property (with £190k equity) to raise each of the 25% deposits required to buy more BTL properties? or will I have to sell the existing property and take the £190 cash and use that as the deposits?
If I can borrow against the existing property how would I go about this, mortgage broker? Do I tell the broker that its for the deposit the buy another property?
Thank you
0
Comments
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Yes, seek out a broker. They will be able to advise you accordingly.
Do you pay tax on the current rental income?"Dream World" by The B Sharps....describes a lot of the posts in the Loans and Mortgage sections !!!0 -
You can potentially raise the deposit by refinancing the current BTL.
Best to speak to a broker as many BTL mortgages are broker only.
Raising for the purpose of funding further investment properties is fine.I am a Mortgage AdviserYou 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 -
Yes I do pay tax on the current rental income minus any deductions of course...
"You can potentially raise the deposit by refinancing the current BTL"
Bear in mind that I do not have any mortgage on the current property so it would have to be a new mortgage I wouldn't be refinancing an existing mortgage, in fact 2 new mortgages..1 for the deposit and another for the property i.e.
£200k property 25% deposit @ £50k and £150k BTL mortgage to buy it.0 -
Yes I do pay tax on the current rental income minus any deductions of course...
"You can potentially raise the deposit by refinancing the current BTL"
Bear in mind that I do not have any mortgage on the current property so it would have to be a new mortgage I wouldn't be refinancing an existing mortgage, in fact 2 new mortgages..1 for the deposit and another for the property i.e.
£200k property 25% deposit @ £50k and £150k BTL mortgage to buy it.
Then you can offset a 75% BTL mortgage on your annual income tax bill as well !!!"Dream World" by The B Sharps....describes a lot of the posts in the Loans and Mortgage sections !!!0 -
"Then you can offset a 75% BTL mortgage on your annual income tax bill as well !!!"
YEP... Woohoo!! just need a mortgage broker now..0 -
Broker definitely the way forward for this one.
Good luckI am a Mortgage AdviserYou 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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