Remortgage main residence to Nationwide with capital raising - deposit of additional BTL property

jonahyk

Good morning all,

I am thinking of remortgaging to Nationwide and raise some capital from my property that I owned, the outstanding mortgage is £75K with LTV 15.6%, property value ~£480K

Is it possible to raise capital from my property when I remortgage, planning to raise £80K extra, making total £155K, LTV 32.3%. Am considering using the raised capital to serve as a part deposit to purchase a BTL property. I have some savings to add to the BTL deposit as well, around 25%. If I can raise the extra £80K, that would help get a better BTL mortgage deal.  

Have been reading through Nationwide lending criteria, though I may not full understand their jargons. It seems Nationwide does not allow capital raising for BTL deposit? I do appreciate residential interests tend to be lower than BTL mortgage rates.

https://www.nationwide-intermediary.co.uk/lending-criteria/borrowing#loanPurpose

Buy land or property separate from the security

Borrowing to buy a property/land that'll then be let out isn't acceptable                            This isn't allowed on shared ownership and right to buy (within the discount clawback period).

Thought I ask for advice and thanks

K_S

@jonahyk That is correct, Nationwide don't allow capital raising for the purpose of buying a BTL.

Generally speaking, that's more an exception than the norm.

jonahyk

K_S said:

@jonahyk That is correct, Nationwide don't allow capital raising for the purpose of buying a BTL.

Generally speaking, that's more an exception than the norm.

Thanks. Not sure if you do know of are any other lenders would entertain such approach of mine?

K_S

@jonahyk Plenty of mainstream lenders will allow a capital-raise remo for the purpose of buying a BTL (in your personal name). Just do what you did for Nationwide and have a look at the criteria for loan-purpose.

Do keep in mind that it's a bit more tricky if the BTL will be in a ltd. co. SPV as that would be classed as a "business purpose" or you need the cash for the purchase of an as-yet unidentified property.

jonahyk

K_S said:

@jonahyk Plenty of mainstream lenders will allow a capital-raise remo for the purpose of buying a BTL (in your personal name). Just do what you did for Nationwide and have a look at the criteria for loan-purpose.

Do keep in mind that it's a bit more tricky if the BTL will be in a ltd. co. SPV as that would be classed as a "business purpose" or you need the cash for the purchase of an as-yet unidentified property.

Thanks K_S, it will be an individual purchase and won't be a SPV.

One of the the reasons I saw Nationwide is its remortgage rates of 1.04% which is attractive but may have to dump it since raising capital to purchase an additional BTL property is not possible. 

I have seen a property that I am considering putting in an offer in.