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Remortgage parents BTL to build in my garden?


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Hello

My parents currently have a BTL property, value of £375-400k with no mortgage, yielding £15k gross per annum. They have pension income of approx. £40k on top of this.

My wife and I have a plot of land at the side of our house, that could get PP quite easily for a 3 bed detached. Cost to build would be approx. £300k

Could my parents get a mortgage on their BTL property for £300k for the build costs?

The new build will be in the names of my wife and me.

Possible?

If so, which bank / broker should we use?

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Probably not with that rental amount, they would need about £24k per annum to justify a £300k loan in most cases.

You might be able to get enough to cover a deposit on a development loan/bridge yourselves though. The costs will be significant though, and whther thats worth it depends on what the 3 bed detached might sell for in the end.

043_logo_final_03.png.0cdf828351f81e6097208048ac2d018d.pngStuart Phillips

Independent, Whole of Market Mortgage Broker

AALTO Mortgages Ltd

Web  www.aaltomortgages.com

Email  sales@aaltomortgages.com

Call  020 7183 1101

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Correct. If you want the best deals. If you need more there are lenders that will lend more for the same rent but you will of course pay for it, perhaps an extra 1.5% on the best buy rates.

043_logo_final_03.png.0cdf828351f81e6097208048ac2d018d.pngStuart Phillips

Independent, Whole of Market Mortgage Broker

AALTO Mortgages Ltd

Web  www.aaltomortgages.com

Email  sales@aaltomortgages.com

Call  020 7183 1101

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since parents have BTL £15k gross or approx £12k net + £40k pension income, what about the property they live in, do they own it?

what is their total net worth that could be taken into account to qualify them for a mortgage/loan?

@noel c, myself a senior looking at this, do your parents know or agree with what you are thinking of, would they take on this risk & what about your payment on the loan or return of the loan back to them? 

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