BTL indexed valuation

Glover1862

I'm currently at 45% LTV with a BLT, I was thinking of remortgaging to 75% and using the extra funds to buy another BTL, again at 75% LTV, both I/O.

To reduce the risk of a price drop or change in salary I thought I'd be able to product switch, I know they don't do another credit assessment but they do a index linked valuation, if the price drops and the LTV goes over 75%, are the likely to refuse the switch and offer svr only???

Worth considering for anyone going close to max LTV, I assume the same applies to residential loans, particularly to those at 90% and above.

YHM

You cannot do a product switch and remortgage at the same time.

If you are wanting to release equity out of your BTL, you will need to apply for it fully. I cannot see a lender doing an indexed valuation, more so, a full valuation.

Glover1862

Thanks, yes, i'll be doing the re-mortgage first with a full application, taking my LTV from 50% to 75%, I'll then buy the other BLT, again doing a separate application most likely with a different lender to the re-mortgage.

As of now both properties will be at 75% LTV, practically the max for BTL. My question relates to values dropping in say 2 years time when the fixes end and I come to re-mortgage again. I was hoping worst case would be a product switch, I understood that no financial checks or valuations were done unless requested, however I noticed that lenders will use index valuations on products switches which at the time could show less than 75%, in which case they'd put me on SVR or I paid the extra to bring it back to 75%. Is that how it works?

YHM

Yes in theory...

Just remember a BLT is quite different to a BTL though....

Glover1862

Yes, one a bit cheaper than the other!

Ah well, I was rather hoping with a product switch you simply change the product with minimum fuss if you're not borrowing extra or need advice, not such a safety blanket after all.