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Remortgage residential to a BTL


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I have owned and lived in my flat for 4 years with a residential mortgage. I am moving out of my flat soon and plan to rent it out. I also want to remortgage to release funds for a new BTL as i have significant equity in the flat.

 

I have been self-employed for the last 6 months or so which means I will not be able to remortgage with a  Res. mortgage. But I have also been told that I won't get a BTL mortgage unless the property is already let. 

 

Does anyone have any experience of this? Ideas of what I can do to release equity in my current circumstance?

 

Thanks.

 

 

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Hi Andrew,

I wouldn't take things that people tell you at face value. I would speak to a Mortgage advisor. 

 

Does the flat meet all the fundamentals of being a good BTL? You should run a due diligence check, how do you know selling isn't the best way to release the equity?

 

I am self-employed Contractor, although I have been running for longer than you (4.5 years) I'm not that bothered about not being a permanent employee when it comes to getting mortgages.

 

I have spoken to Lisa at Keys Mortgages (find her in previous podcasts, early ones). 

I have also spoken to Leigh at Contractor Mortgages, and she's presented me with some juicy BTL and Resendential deals. I have only just received them by email today and I don't know if it will go through, but she seems quite positive at the prospect of getting me a mortgage and three people who contract at the same place as me have a mortgage from her. (please PM me for details of Contractor Mortgages as I could get £50 for referring!)

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You can do something called a let to buy. This is letting your existing property in order to buy a new one. It's a kind of backwards buy to let but you don't have to prove income, sometimes you'll be asked for a letter folrom an agent to show what it will achieve and sometimes you'll just be asked what think it will achieve. You can also port your existing mortgage onto your new property avoiding ERCs and they may look at your 6 month history depending on who it is. There's a few that will be fine with 1 years accounts. Hope hat helps - I'm a mortgage broker of 15 years

Lucie

Lucie Wade

 

Wade Finance Ltd

Specialises in complex mortgage cases

Landlord with portfolio

 

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Hi

 

I'm afraid the issue you face is that most BTL lenders require applicants to earn £25k. As you are now self employed, your only way of proving income is by showing tax returns, and most lenders want 2 years. A few will accept 1 year however. BTL lenders typically also need applicants to have been self employed for at least a year.

 

There are a few BTL lender that don't have a minimum income requirement, but they are concerned about those with incomes too low to support the mortgage on a residential basis using BTL schemes. As a result they often impose additional limitations to prevent this for first time landlords (defines as someone who has not owned and let a property for 6 months). Often these lenders still require some income to be proven, and require applicants to have been in self employment for over a year.

 

There is a new lender to market, TSB, who will lend to first time landlords, with no minimum income and more importantly no minimum self employment period. This might be useful to you.

 

Hope that helps.

 

Regards

Stuart Phillips

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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