Mortgage Against Owned Property?

robbie89

Hi,

I'm looking to buy 2-3 buy to let properties. I currently own a house (mortgage free) worth around £200,000.

I want a mortgage on this and to use the money for buy to let deposits.

Is it feasible they will lend me around 75% of the properties value for this purpose? Are there any other options?

My salary is around £40k.

Thanks for any help you can offer.

Thrugelmir

The source of the deposit may well be an issue for the BTL lender.

The purpose of the release of the equity may be an issue for residential mortgage lender.

Alternative option is to downsize and release equity yourself.

PBA

I don't see any issues here in theory.

A residential lender would most likely be happy to lend for the purpose of buying BTL properties, as long as you can show that the BTLs would be self financing and wouldn't be a drain on you financially. The amount you could borrow on this property would be based on your salary.

A BTL lender would most likely be happy with the source of deposit (you're raising money against an unencumbered property, that's fine, they wouldn't be so happy if you were borrowing it on an unsecured basis). The amount you could borrow here is based on the predicted rental income from the property.

I'd suggest having a word with a local estate agent, ideally who does sales and lettings. They'd be able to let you know how feasible your idea is, based on the market in the area.

GMS

Broker would be useful for you here. They could ensure the correct lender for the residential remortgage and brokers have access to many Buy to Let products not available to the direct channel.

Rental income would dictate the loans on the BTL's. Earned income will dictate the residential borrowing.

amnblog

It is a well used method of building a BTL portfolio Robbie.

As my colleagues say, a mortgage broker is essential for this.