remortgage to buy a house with a friend

kbar1234

Hello,
I am mortgage free and would like to release money from my house, its only a small property valued around £75,000.00.
A friend and myself have talked about buying a property together to let out, we are looking at something around £80,000.00, so that would be £40,000.00 each.
At the moment I have very little savings as the mortgage has only recently been paid off, I am 49 years old, in full time employment and live alone (son stills lives at home but in full time work).
Would I be able to release money and remortgage or would I need a buy-to-let mortgage. 

dimbo61

Can you take out money from a property you own YES subject to you earning enough to pay a residential mortgage ? 
Would your friend have to get a BTL mortgage to pay the other £40,000 plus all the fees and costs ?
Don't forget the extra stamp duty as you would then own 2 properties.
Is this a good idea is a different story.
You would have debts and not be mortgage free.
You could be repaying a mortgage on your home till your 67/68/70 of age.
Would the BTL business make any money ?
Have you done your research on both the BTL/Rental market and your friend !

kbar1234

thanks for the honest reply, my friend is releasing money from her own property, but you are right I need to do the calculations on whether releasing the money is the right option. I am the planner and my friend is the risk taker, a good balance. 

davidmcn

If you have very little savings then what are you going to do when you need cash for something else?

kingstreet

Yes, it can be done. Should it be done? Only your own research is going to provide an answer to that.
You only get a BTL mortgage on a BTL property. You are looking for a residential remortgage of an unencumbered property. Affordability will be based purely on your own income and not on any potential rental income.

Petriix

davidmcn said:

If you have very little savings then what are you going to do when you need cash for something else?

Presumably one could borrow a little more than immediately required so as to have a rainy day fund. We certainly did when we bought our house so that we had enough to decorate and buy furniture etc.