Current Nationwide Mortgage and wanting to release equity

spamberler

I currently have a house I have owned for 10 years and lived in. I have 48k left on this mortgage and I would like to release some equity for a deposit on a new house with my boyfriend and rent my house out.

I have had my house valued and it's worth 95k.

I called nationwide and they said that I cannot do this. Is this just a Nationwide thing or will other lenders say the same?

It's all a bit confusing

tom2205

I don't see why you wouldn't be able to do so and could just be Nationwide refusing additional funds. Taking out additional money from it for an onward purchase is a common thing and you would be looking at a let to buy mortgage so would have to fit in with Loan to Value for new lenders.

One thing to bare in mind for the onward purchase is because you will become an 'accidental landlord' on your existing property you will be liable for higher stamp duty rates on the NEW purchase. So if you were purchasing a property of £200,000, instead of paying £1,500 in stamp duty, you would be paying £7,500.

spamberler

Is that regardless of the new property price or is that on houses over a particular price?

TrickyDicky101

spamberler wrote: »

Is that regardless of the new property price or is that on houses over a particular price?

New house must be at least £40k - but then the additional SDLT will be at 3% on the whole of the purchase price.

tom2205

The amount of the stamp duty is staggered so will be linked to the purchase price:

3% on £0-125k (above £40k)
5% on £125-250k
8% above £250k up to £925k.

That is on the amount as well so if you purchased somewhere for £150,000 it would be 3% on the 1st £125,000 and then 5% on the additional £25,000.

spamberler

Ok thanks for the information

kingstreet

Nationwide's policy changed.

Nationwide will not consider for the following second property uses:

Capital raising against a main residence to purchase a 'buy to let' i.e. Remortgage with additional borrowing, Subsequent Additional Borrowing or raising capital against a mortgage free property.

They will permit you to do a let to buy remortgage with subsidiary the Mortgage Works and do your new residential with Nationwide, but they won't do the additional borrowing and consent to let themselves.

spamberler

Ok that's great information, thanks