Remortgaging Buy to Let

straight

Hi 
Can someone help with the question below.
Someone has a rental property valued at £210000. The mortgage remaining is £115000 and the equity in it is £95,000. What is the maximum amount of money they could release from it to put down a deposit on another rental property ?
The other rental property is valued at £345,000. Would it be possible to release £100,000? 

pramsay13

That would give you a mortgage of £215,000 on a house valued at £210,000 so I'm going to lick my finger and stick it in the air and say absolutely no chance.

straight

Thanks for getting back to me. I can’t get my head round remortgaging, so the max they could borrow is the same as the equity in the house 

Caz3121

assuming 75% LTV for a BTL
property value £210k mortgage £157.5k less current mortgage leaves £42.5k to be possibly released
new property £345k mortgage = £258.5k, deposit required £86.25k (in addition to fees and stamp duty) 
if you can release £42.5k from your current property then you would be looking to find £44k + fees and stamp duty from elsewhere

straight

Hi Caz321
apologies for coming across ignorant but what is the number £157.5K 

straight

Oh it’s 75% ltv !

kuratowski

£210k (property value) x 75% (assumed max LTV) = £157.5k

Stamp duty on the purchase of £345k BTL property would be £17600.

payless

Has you situation changed ——
previously you stated 
I”I am receiving income based ESA, PiP and housing benefit. I have been claiming housing benefit”  

or is it for your potential landlord.... lenders Generally don’t like B2l mortgaged on properties Occupied by family. 

Borrowing can also be restricted due to the rent charged against the mortgage ( rental cover) and other income .

pramsay13

straight said:

Thanks for getting back to me. I can’t get my head round remortgaging, so the max they could borrow is the same as the equity in the house 

No because they would give you a 100% mortgage which is not an option. 
You can get 10% deposit or even 5% deposit options for normal mortgages but buy to let you need more, maybe 20 or 25% deposit.

This is all pre-corona virus so the rules may well change in the next few months.

straight

Payless I was asking on behalf of somebody else

Durban

I think that you will need more than 25% deposit.
BTL deals 75% LTV and over are being pulled all the time and some are stopping their BTL lending altogether , possibly albeit temporarily.