Getting property finance with security , how`s it best done ?

AnotherJoe

Good points by AdrianC, the extra tax relief on a BTL mortgage might be outweighed by a cheaper residential mortgage. You do need to run the numbers and see how it works out.

saajan_12

100rotor wrote: »

Hi All

I`m fortunate to own two properties outright , round figures for simplicity , property A is worth £100k and is rented out , property B is worth £200k and is my home .

I`d like to sell my home /B and buy a £300k house but keep A and carry on renting it out , as I`m self employed getting a regular mortgage could be a problem so,

Can I use house A as security to raise finance to buy a bigger home ?

How the best way to go about it and who`s best to approach?

Credit rating is squeaky clean.

Thanks

You could raise some finance on the back of property A, but
1) upto 75k (BTLs don't generally exceed 75% LTV)
2) only if the rent income as valued by the bank supported the mortgage payments (this may differ from the actual rent your receive)
3) higher BTL rates (if more than 1.25x the best residential interest rate, this would offset any tax benefits)
4) incur additional valuation and searches costs which the lender would pass on to you
5) still need another loan for the remaining 25k + buying / selling costs (say 5-15k for SDLT, solicitors, survey, 2 mortgage valuations, EA fees etc)