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Hi all. I am wanting to get a mortgage on my unencumbered property (value 750 k) at 60% LTV to release 450 k for investment purposes. I would then like to give a directors loan to my investment company to invest into BTL. I don’t see any issues with the high street lenders allowing me to do get a mortgage BUT will they want to know why ? Surely this is irrelevant as long as I’m able to meet their income and credit rating profile. Thanks in advance

Hi all, Just helping to enquire on behalf of a friend of mine here in Hong Kong. They are in a position where they hold a flat containing subdivided rooms and have a mortgage on the property. These flats have been refurbished to an exceptionally high standard last year and they are now considering their options in terms of extracting the equity. Just wondering whether there is the option to remortgage the property without raising too much suspicion and whether anyone can assist with this. From what I understand, the property strictly speaking is not fully compliant to local regulations, but has been refurbished according to the general trend in the area in terms of having an "HMO style" property. The reason why the large majority of these types of apartment are not done according to the local regulations is because of the vast costs associated with it, thus making the option unfeasible for the majority of investors. If they were to consider remortgaging the property to extract the equity, this would require a valuation to be completed as part of the process. In turn, they would have to invite a representative to carry out the valuation. Could this indirectly initiate legal action against the owner? Just wanted to be aware of any repercussions. Thank you in advance for any advice.

Hey all, I'm hoping someone can help me understand a bit more about equity release for the purpose getting a deposit for another home. I have a flat in London that I bought in 2010 on a 35 year mortgage. I have managed to get the remaining mortgage down to around 10 years and in that time the flat has also gone up in value. I want to try and keep the flat on if I can, so want to understand how much equity I could potentially release and under what circumstances that capital could be used by way of a deposit on a new place. For simplicity, say I bought the flat for £200,000 with a deposit of £30,000, requiring a mortgage of £170,000. I believe that results in an LTV of 82.4%. Now lets say that today the flat is worth £300,000 and I have paid off the mortgage so only £100,000 is remaining. That I believe gives me a new LTV of 33.3%. I've read that for a buy-to-let property, you generally need an LVT of below 70%. Using the example above of a £300,000 property with £100,000 left to repay, I could potentially take out £90,000, resulting in a new LTV of 70%. Is that correct? If so and assuming I was able to re-mortgage the flat on a buy-to-let agreement, how would another mortgage lender then factor that arrangement in when assessing my situation? Would they just see me as a guy with a £90,000 deposit, in which case I could borrow whatever I could borrow with them, or would the fact I had an existing property and mortgage affect any new affordability calculations? Hopefully that makes sense, I just want to know what my options are in terms of keeping the current flat or not. Thanks in advance! Matt

My long term girlfriend and I have been looking for a route onto the housing ladder. My girlfriend’s Dad owns a commercial premises on which he runs a profitable laundrette from. He also owns the freehold to the first floor which has separate access and is currently being run as a 3 bedroom HMO. Long story short, the property is well suited for a loft conversion / extension, next door have already done this a few years ago. My girlfriend’s Dad has agreed to “gift” us ownership of the proposed 2nd self contained flat should we fund the works. The works would comprise a small ground floor extension to the business coupled with a light refurbishment, first floor reconfiguration within the existing footprint and a second floor loft conversion. The first floor is currently very dated and a complete refurbishment with a better layout would increase the rental income massively. By day I am a QS and comfortable with the planning and construction aspects of the project. The construction works will cost in the region of £100k-£130k depending of scope and final specification. My girlfriend and I plan to raise the capital from a family member who will release some equity in one of their properties. We will then repay them at full cost plus additional interest. Up until now, it all seems fairly straightforward, however this is where it gets a little complicated. The approximate financials of the project: All in construction costs (including fees): £130,000 Cost of borrowing (from family member): +/- £7,000 This next part is on my to do list in the coming week, I have been meaning to take the plans to a few estate agents and see if they will do a desktop valuation of the proposed plans. At this stage, all I can do is compared to the current market. This property is based in Teddington, London, comparable 1 bedroom flats, just across the road are selling for £330,000 (these are about 15m2 smaller than our proposed flat). To show the feasibility of the projects financials I will assume a final appraised value of £250,000, which is way under what I anticipate the value to be (anyone who knows the areas, will know 1 bedroom flats rarely appear for less than £300,000). Total spend: £137,000 Final appraised value: £250,000+ We would then mortgage the flat after 6 months at the appraised value of £250,000 +/-, using a 60% LTV mortgage. Meaning we would maintain 40% equity (approx £100,000) and release 60% (approx £150,000). This £150,000 will be used to repay our total spend to the family member. Should the appraised value be more and we manage to release more equity, this will be used to begin our property portfolio under the ‘buy, refurbish, refinance’ model. We are currently facing two areas we need some advice on. Question 1: My girlfriend’s Dad owns the property in question as a second home. Once the works are complete, we need to figure out the best way to transfer ownership (the new lease hold) of the second floor flat from my girlfriend’s dad to us! I understand we could be facing capital gains tax and I know there can be issues when gifting a property. I am looking for any tax experts who may be able to recommend the best way to go about this handover? Question 2: As mentioned previously the existing property comprises of a commercial space on the ground floor and HMO on the first floor. The proposed second floor flat which we plan to own and mortgage will be above both the commercial space and HMO. I am aware that when it comes to getting a mortgage on a property above commercial space you are faced with far fewer mortgage options. This is why in the calculations above, I have opted for a 60%LTV mortgage as my gut feeling is this would open up more mortgage options, if we can get a lower LTV, we would probably go for it. My concern is that for whatever reason we may not be able to get a mortgage at all on the second floor flat. Can anyone see a reason why this would be the case? If so, who would be the expert to consult, I am assuming a mortgage broker?

Hi, I'm looking to release some equity in my home and use this cash as a deposit on my first buy to let mortgage but everything I've seen suggests you need to be over 55. Is this true? if not where do I start? Many Thanks

Hey Fellow Hubbers! So my property in Sheffield is coming up for remortgage now and I am trying to decide whether a 2yr or 5yr is best. This is my first property and the first remortgage, so just interested in what people normally do. I know it depends on your goals, and for me, it’s maximise cashflow and pull out as much equity as possible to reinvest. I do like the idea of knowing what I will pay for the next 5 years but as I am only at the beginning of my property journey feel I need to be a bit more aggressive and recycle my deposit to get that snowballing rolling. So my thoughts are that rates will not go up too much over the next 2 years (according to economists but who knows with Brexit yawn), so I could do a 2 year and then a 5 year to lock in a lowish rate. I could also potentially just take a 5 year and then get a further advance or second charge mortgage to run alongside it if there is substantial equity. The 2 year would improve my monthly cash flow by about £30. The other thing is those pesky arrangement fees, sure they give you better cash flow the higher they are but your mortgage ends up getting bigger and bigger, what are your thoughts on this? I know that it may look cheaper paying the arrangement fee, but you will be paying interest on that fee for the life of the mortgage right! Any advice would be greatly appreciated! If you need any other info to give me a better answer, please ask Cheers, Alex

I have had a property in London for the past 10 years and it has c50% equity in it. Originally bought to live in it then had consent to let while I have been overseas. I am returning to the UK in January and want to build my portfolio. However because the rental yield is quite low I am having trouble releasing equity as a buy to let mortgage. Any advice?