Can you remortgage against owned outright home for buy to let ?

Rd350lc

Would somebody please be able to advise as we are thinking of getting into the buy to let market.

We currently own outright a 300k property and have a 40k deposit saved .
We are thinking of buying a flat or similar for around 150k in the Dorset area that we could let out as either a holiday let or permanent let for around 15 years until retirement age and hopefully get some use out of it ourselves.

What type of mortgage would we need, a traditional , buy to let or is it possible to remortgage at a better rate ?

We are aware of the costs involved in purchasing a second home , but don't know if it possible to raise funds against our current property to buy a second home to let out .

Thanks in advance

glosoli

If the mortgage is secured against your main residence then it would be a residential mortgage you would require. You would approach a bank for an unencumbered home equity release application, and you would require a solicitor to act on your and the bank's behalf. Raising funds against your property to purchase another property is a valid reason to raise capital.

It should be a relatively straight forward process to be honest.

Rd350lc

Thanks for taking the time to reply

Lilla_D

Further to glosoli's post, all of which I can only agree with, just some thoughts about the other points raised:
- if you wanted to get a mortgage on the new property, you'd have to specify whether your intention was to rent it out as a normal BTL or as a holiday let. Not many lenders allow holiday lets and they all have their T&Cs.
- if you decided to get a normal BTL mortgage, then most lenders would want 20-25% deposit and your lender options will also depend on the property itself (e.g. new built above a shop or an ex-council with only 70 years left on the lease) and the rent you can potentially achieve as well as your personal income, credit history, etc.

A broker can go through the above with you and present you with options and figures to compare raising money on your current home for the full purchase price of the new flat or just some money on your home and taking a mortgage on the new flat as well. Then you should be in a better position to make an informed decision.

Old_Git

I mortgaged my own house to buy a rental property. When it came time to remortgage the rental income was included as income to get a better deal .I have never had a BTL mortgage.

dimbo61

You really need to speak to / Employ a Mortgage Broker for this

Rd350lc

Thanks all , mortgage advisor on the case as we speak !