Acceptable uses for proceeds from additional borrowing under mortgage

lek28

Hello there

I've recently had both some disappointing and positive news based on a conversation with my existing mortgage provider (Halifax). I had originally called them to inquire about raising additional borrowing to pay the deposit on a commercial property investment. This will not work due to their underwriting requirements, although I got the pleasantly surprising news that my property is valued at a lot more on their books than I had been thinking (when does that ever happen in life, right?!? :j), implying a very low LTV (c.40%).

I've got no desire to sell, and have grudgingly put the initial commercial investment idea out of my mind, but it does make me curious as to what I could use proceeds from re-mortgaging for. I understand that there are FCA restrictions on what this could be.

I am aware that home improvements and purchases such as cars and white goods are possibilities, and even personal holidays (all subject to affordability). However, can anyone explain to me what the actual criteria are? Are there specific guidelines published by the FCA, or does the lender basically need to be comfortable that I'm not a money launderer / taking out cash for the sake of it?

Thanks in advance for any insight.

Thrugelmir

Will be an internally set board level policy. Lending on released equity. Is not a mainstream activity for mortgage lenders.

ACG

It is lender specific rather than an FCA requirement.
Some lenders say anything legal, others say not for business or investment purposes some have a defined list.

There could also be LTV caps on certain uses but again, lender specific.

amnblog

Why would Halifax lend you, on a residential mortgage arrangement, these funds for a purpose on which they can lend under a commercial arrangement?