Mortgage on property to fund buy to let?

GC1312

Hi,

I was wondering if anybody could provide any advice as I am looking to fund a buy to let investment through borrow money against a property...

Earlier this year a family member purchased a commercial property (approx 200k) using a combination of business loan and savings but assigned the deeds to the property in my name.

The loan is with the limited company and I believe the bank does not have any rights to the property in the case of non repayment.

Would it therefore be possible to borrow money against this property (which is technically mortgage free) to generate a deposit for a buy to let?

Thanks in advance for any help

Teamocil

I hope not

silvercar

Your problem will be if the lender for the business loan calls in the loan. Business loans are often for shorter terms and are renewable. If the lender isn't happy for any reason they can decide to call in the loan. One of the reasons the lender may not be happy is if the business doesn't have sufficient assets.

The property not being in the name of the business may make the lender unsettled; the lender could at any time ask for security for the loan. This could be a problem if you have already borrowed against it.

GC1312

Hi, thanks for the response. The lender has taken another property (worth a lot more than the loan) as collateral. So I'd imagine that would act as their security and the ownership of the property in my name would not make a difference?

sal_III

Have you asked said family member how does s/he feels about you mortgaging their property?

GC1312

Yes - forgot to mention but the family member is completey on board with this. (Was in fact their idea)