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Helpful ReplyRemortgaging / Additional Borrowing

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NuttySS
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2015/01/03 15:10:57 (permalink)
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Remortgaging / Additional Borrowing

All,
I'm after a bit of help / advice, I'm not 'up' on mortgages etc I've only ever had a few terms so never really had to do much with them.
 
I've got a property at the minute based on its previous valuation with 80% LTV rate, with its renovated valuation it will be more like 55-60% LTV.
 
I'm contemplating keeping it instead of selling and having it as a rental property.  My query - As i'll have decent equity in it, can I remortgage to release some of that cash i.e take it to the minimum LTV requirement for a BTL mortgage.  Do they have specifics in terms of what reason you have to want to free up the cash or are they not fussed so long as they're covered in getting their cash back.
 
I know I'm best speaking to the bank long term, I just wanted a few non-bias opinions as no doubt the bank will tell me what benefits them best.
 
Thanks in advance.
#1
stomper90
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Re: Remortgaging / Additional Borrowing 2015/01/03 15:35:16 (permalink)
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You normally have to wait 6 months (since you bought it) before you can remortgage.
 
I pretty sure they dont care what you do with the money.  I did similar to clear credit card debt.
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westbelfastguy
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Re: Remortgaging / Additional Borrowing 2015/01/03 16:30:31 (permalink)
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I think you'll need to change mortgage anyway as it will be a rental property. I'm not 100% certain but I think it may need a buy to let mortgage.
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WhiteSnake
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Re: Remortgaging / Additional Borrowing 2015/01/03 20:29:04 (permalink)
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westbelfastguy
I think you'll need to change mortgage anyway as it will be a rental property. I'm not 100% certain but I think it may need a buy to let mortgage.


Yeah also if the tenants burn the place down insurance won't be covered if it's not down as being let.
 
 
#4
westbelfastguy
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Re: Remortgaging / Additional Borrowing 2015/01/03 22:07:07 (permalink)
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According to sarah beeny there is specific landlord insurance you're supposed to get. the tennants would need their own insurance for personal belongings
#5
orange86
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Re: Remortgaging / Additional Borrowing 2015/01/03 22:12:16 (permalink)
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i did one of my parents rental property insurance with direct line,
it was a landlords policy to cover the building.

boom
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teapot
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Re: Remortgaging / Additional Borrowing 2015/01/03 22:15:23 (permalink)
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you need to cover the monthly payments with 125% of rental income
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westbelfastguy
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Re: Remortgaging / Additional Borrowing 2015/01/03 22:23:35 (permalink)
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if there is landlord insurance that also covers replacing things like furniture and appliances that may break while there are tennants in that would be handy as well. people aren't just as careful with stuff that isn't theirs, especially students
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northumbriman
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Re: Remortgaging / Additional Borrowing 2015/01/03 22:24:52 (permalink)
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I was a mortgage adviser for ten years. You will need a buy to let mortgage if you want to rent out the house. The criteria they use to assess the amount they will lend is based on two linked formulae. The maximum loan to value percentage they offer which in buy to let is usually around 80% coupled with a calculation based on the rental income you will generate. Each lender has their own calculation and criteria they lend within. As the best buy to let lenders tend not to be high street companies its not always easy to find them. Best thing to do is go to an independent financial adviser and get them to check your figures and options. They will know which lenders to approach so you don't end up wasting time and money on surveys and paperwork with companies who won't actually lend.
#9
northumbriman
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Re: Remortgaging / Additional Borrowing 2015/01/03 22:26:49 (permalink)
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Oh yeah and the buy to let companies will usually expect you are taking money out to put into other properties or to clear debts but won't ask many questions as its non regulated lending unlike residential mortgages.
 
#10
westbelfastguy
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Re: Remortgaging / Additional Borrowing 2015/01/03 22:28:11 (permalink)
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Are there added risks with it being unregulated then? 
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northumbriman
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Re: Remortgaging / Additional Borrowing 2015/01/03 22:41:42 (permalink)
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No it just means if things go wrong you have different processes to follow rather than directing complaints through the fsc or financial ombudsman service. It falls under the same area as corporate finance, business loans and similar. Biggest issue with buy to let is remebering to budget carefully. Keep your mortgage payments manageable and build a reserve fund that will pay 2-3 months payments in case you lose a Tennant and can't quickly replace them. Also make sure you get good buy to let insurance in case you get a bad Tennant who damages stuff then flits. It is rare and especially if you use a good letting agent to find and vet your Tennant's for you.
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Smokey87
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Re: Remortgaging / Additional Borrowing 2015/01/03 23:36:25 (permalink)
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I work out of africa as a limited company. Im looking at buying a new house at the end of the year. Not looking forward to getting a mortage i earn a good wage but i know its going to be a hassle with being a limited company.

 
 
#13
northumbriman
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Re: Remortgaging / Additional Borrowing 2015/01/04 09:00:54 (permalink)
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Being a company will not stop you buying but again forget the standard residential lenders. Go to a business banker and discuss the idea of purchasing a property via the business. That way it becomes a business assert rather than a private home. The risks to yourself are that if the business goes tits upxyou lose it as an asset in the consolidation process but as long as the company is in good shape it will be fine. You can always look to buy it from the business in the future.
#14
NuttySS
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Re: Remortgaging / Additional Borrowing 2015/01/04 13:08:34 (permalink)
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Spot on all, thanks for the help.
 
I'll get digging on whats what!
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faipdeooiad
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Re: Remortgaging / Additional Borrowing 2015/01/04 13:34:40 (permalink)
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northumbriman, you say you used to be a MA - if you don't mind my asking, was there any particular reason you left it? I'm starting my CEMAP through work in february with a view of moving as soon as i have interview-competant experience.
 
is it worthwhile getting into?
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northumbriman
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Re: Remortgaging / Additional Borrowing 2015/01/04 15:13:58 (permalink)☄ Helpfulby faipdeooiad 2015/01/04 16:37:42
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I was in the mortgage industry up until the credit crunch. At the time I was working through a major estate agency. Up until the collapse independent advisers and brokers got decent rates via the banks as introducers so we could get a better product for the customer along with good advice based on their specific needs. After the collapse the banks basically started undercutting brokers and offering preferential rates over the counter. I lost heart as I didn't feel I could sit there telling people I was getting them the best deal when I knew they could go into their own bank and save money. The company I worked for being a corporate business saw the downturn in money from all of the advisers and having carefully assessed the market and condition of the financial sector decided the best response they could have was to increase our targets and introduce behaviour management for those not hitting their targetrs. 
If you are going into the market make sure you know who you are going to work for. What the sales targets are. Where you will be based and in turn what the local market is like. Who are you competing with for customers etc. Check into lead generation too. Anything you are told regarding earnings is best to take with a pinch of salt. Its hard work and long hours as you have to be available when clients want you which usually means evenings and weekends but also working when banks and lenders are open so you can chase applications! Good luck on the cemap. 
#17
sl
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Re: Remortgaging / Additional Borrowing 2015/01/04 16:20:38 (permalink)
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Snokey with a corporate mortgage you risk paying higher rates as apposed to a residential mortgage which you will be covered by the FCA. I don't see why You can't get a residential mortgage.
#18
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