Remortgage residential and purchase BTL

Avro1995

Hi all — just after a bit of advice as I’m a bit stuck on the best way to approach this.

We’re currently with Vida on our residential mortgage — the fixed rate finishes in October/November. Since then our credit has been sorted (previous CCJ now dropped off), so we're hoping to remortgage onto a mainstream lender with better rates.

At the same time, we’re looking to release some equity to fund a first-time buy-to-let purchase but here’s where I’m getting a bit stuck:

• We haven’t found a BTL property yet, so we don’t know exactly how much deposit we’ll need.

• The remortgage (with equity release) wouldn’t complete until around October.

• We don’t want to release, say, £X now only to find later that we actually needed more for the BTL deposit when we eventually find a property.

It feels like a bit of a chicken-and-egg situation — we need the funds to go shopping for a BTL, but don’t want to release the wrong amount without knowing what we’ll actually buy.

Has anyone else been in this position? What’s the best way to structure this? Is it better to release an estimated amount now, or wait until we’ve got a property lined up? Also, are there any lenders that allow more flexibility or would lend for a BTL before we’ve actually found one? We are having a meeting with a mortgage broker but just wanted to clarify how this would normally be done in a kind of timeline situation? 

Would really appreciate any advice or experiences — thanks!

anselld

Release what is sensibly affordable without going to an expensive LTV.  That then sets your budget for the BTL deposit, not the other way round.

StephenMortgages

Broker here - you can always set the remortgage for what you feel you will need and then start looking for BTL properties. If things change before completion and you need to borrow more or less, then you can do this and change the remortgage. You may have to change rate if this takes you into new brackets.