Is there a limit to how much additional borrowing we can ask for?

Waadi001

The fixed rate period of our (mine and my brother's) residential property is coming to an end soon and we are thinking about re-mortgaging with additional borrowing in order to use as deposits to purchase one or more buy-to-let properties.

Due to the rise in property prices in the last couple of years we have quite a significant amount of equity in our property ie value of property £380,000, current mortgage outstanding £210,000, equity of £170,000.

If we asked to borrowed 75% LTV which would be £285,000, then additional borrowing would be £75,000.
We would have no problems in affording a mortgage on the total of £285,000.

However would mortgage lenders allow people to borrow an additional £75,000 on top of their outstanding balance or would they start asking a lot of questions, especially since we will in effect be using the lender's money to purchase these buy-to-let properties.
Is there a limit to how much extra that can be borrowed?

kingstreet

Depends on the lender and affordability.

For example, Nationwide will do additional borrowing upto 80% if you can afford it, but will no longer lend for a deposit for another property.

Thrugelmir

Waadi001 wrote: »

would they start asking a lot of questions, especially since we will in effect be using the lender's money to purchase these buy-to-let properties.

Use of funds will be of interest to the lender. As the purpose may well put them at more risk. Days are gone of property being an ATM to withdraw from. Mortgage lending is to low margin to be used for other purposes.