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Buy to let mortgage advise please
Leothecat1
Posts: 1 Newbie
I am considering arranging finance to buy a flat under a buy to let interest only plan to assist my son and his friend to rent once they have finished university later this year.
I have a property with a value of approx £525000 a£550000 with a small mortgage outstanding. My intention is to try and refinance to secure the funds to buy a flat as outlined above.
What are the issues or problems that I might expect attempting this?
Any advise or assistance would be very much appreciated, thanks.
I have a property with a value of approx £525000 a£550000 with a small mortgage outstanding. My intention is to try and refinance to secure the funds to buy a flat as outlined above.
What are the issues or problems that I might expect attempting this?
Any advise or assistance would be very much appreciated, thanks.
0
Comments
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Many lenders no longer offer interest-only.
Affordability will be based on a repayment mortgage by those that do.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 -
Sometimes, flats can also be more difficult to obtain mortgages on as well. Most lenders will also refuse BTL mortgages where the tenant will be a family member."Real knowledge is to know the extent of one's ignorance" - Confucius0
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The funds are being raised on main residence, not by BTL mortgage on the target property, I believe?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
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How much equity in your property?Leothecat1 wrote: »I have a property with a value of approx £525000 a£550000 with a small mortgage outstanding.
What other savings/resources?
What income?
Value of intended BTL property?
Rental income?
Any mortgage (interest only or repayment) will dependant to some extent on the above.
As stated, letting to family is often prohibited by lenders.
See also
New Landlords (information for new or prospective landlords)0 -
Is the property you now own your residence or a property you let?
You could remortgage your residence to fund the BTL flat. This would avoid the issues lenders might have with letting to family or flats but, as said, it would likely mean that it would be a repayment mortgage (which may not be a bad thing if secured by your home).0 -
If the mortgage is not on the BTL property itself you will not get tax relief on the interest.0
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If the funds are used to purchase the business asset, the interest on a loan upto 100% of the value at the time the letting starts, will be an allowable expense, regardless of what the loan is secured on.harrys_dad wrote: »If the mortgage is not on the BTL property itself you will not get tax relief on the interest.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
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