New Member - Cardiff - N00b

[khuram 2]

Howdy folks I am from the greatest rugby nation in the UK - Wales obviously!  I just finished Rob Dix's Property Investment For Beginners definitely helped me flesh out some ideas I have. Maybe you guys can have a look at my ideas and make some suggestions if you are not too busy in the lock down - between the kids, garden work and trying to look like your busy so the wife doesn't ask you to do the dishes! 

I have a residential property I bought 5 and a half years ago, put 15% deposit down on a standard residential mortgage. Property value has increased about 30k in that time and have about 66k worth of equity in that property. Haven't done anything since as have been building up my business, but have been looking at property to diversify initially my revenue streams but eventually be the main source of income.

I am now looking to get a Buy-to-let property (under 100k) - have a decent amount of savings (or will have) / 25% (seperate to the equity in my property). I plan on going down the BRR route (buy, refurbish & refinance) on the BTL. 

I guess I am little unclear on if I can go down the bridge finance route initially and then refinance after 6 months on a traditional BTL mortgage and pull out the loan to value - LTV (75%) and put that in to another property 6/12 months later. Feedback on this would be great.

Also (perhaps a dumb question) if I was to take out a standard BTL mortage and after two years refinanced and pulled the LTV (75%) - would i be paying two lots of repayments or just one? How much approx would my refinance deal go up by approx? I just want to make sure that whoever the tenant will be is being charged enough to cover my repayments. Any rough ideas are welcome.

 

 

[khuram 2]

I am guessing the lengthy post put people off lol 

[Scotty D 6]

Hi Khuram,

Welcome to PH and good luck with your investments.

The bridge for BRR is a good option, hopefully the value added after the refurbishment will allow you to get most or all of your money out when you come to refinance on to a Buy to Let and settle the Bridging Loan.

If you purchase on a BTL mortgage and refinance 2 years later you can potentially take some of the equity out if you've added value through a refurbishment or inflation. 

You will only have one mortgage payment to make.

Hope that helps.

Scott

[khuram 2]

Thanks Scott  

[Nathan Cole 20]

Hi @khuram

Welcome to the forum!

What you're looking to do certainly sounds achievable. It is worth noting that there are one or two mortgage lenders who will allow you to remortgage within the first 6 months if required (I wasn't sure if the 6 months mentioned was your refurbishment timescale, or simply a requirement from a BTL lender you have already spoken with). 

If you have any questions about the bridging or buy to let mortgages, then please do let me know. Always happy to help. 

Best regards

Nathan Cole

 

 

[khuram 2]

Hi @Nathan Cole spoke to a mortgage broker and he basically told me my credit rating is going to make it difficult to get a BTL mortgage - so looking at putting it in a family members name (where they are older, 66) but broker says aslong as the monthly rental is 125% of the monthly repayment and the family member has the deposit then it wont be an issue. I need to have a more detailed chat with the broker about pulling out the LTV within 6-12 months to use for other projects. 6 months yes would be our timescale. 

 

Right now however everything is on hold due to this covid-19 situation.