Ask the experts
About our experts...
At John Charcol, we are constantly asked for advice by borrowers on what they should do when it comes to mortgages. As such, we created this section so that you can submit your questions to our experts. The answers are provided by a number of people who have years of experience in the mortgage market. The team is led by Peter Woodward who spent his formative years as an underwriter with one of the major UK lenders and the last 10 years in our Technical Department along side Ray.
So please do submit your question and we will do all we can to answer it as quickly as possible
Please be aware that these answers can only be generic and no personal recommendations can be made.
Posted on 5 July 2010
I have a property worth £250,000 with an outstanding mortgage of £93,000 with 14 years left to run, I need to raise £65,000 to pay off my wife from who I am seperated,any advice would be appreciated.
Categories: Raising capital out of property
Posted on 1 May 2010
I am a UK citizen now returning to live in the UK, from Australia. I have an Australian property which I own 100%. Can I get a mortgage in the UK, using my Oz property as security, to buy a UK house? If so what mortgage amount and interest rate would apply?
Categories: Buying abroad, Foreign Currency or foreign tracking rate mortgages, Raising capital out of property, Special circumstances
Posted on 23 April 2010
Is there still a 100% mortgage? I am currently looking to move to a bigger house, but already have a mortgage. Can I swap my current one to a buy to let in order to get my new mortgage? How can I raise the 10% deposit?
Categories: 100%+ borrowing, Buy-to-let, Let-to-buy, Raising capital out of property
Posted on 18 April 2010
I have two property's that I own out right, one is worth about £65000 and the other about £80000. I also have a third with a 5£0000 mortgage on that one is worth about £130000. What is the best way to raise funds to purchase another property?
Categories: Buy-to-let, Raising capital out of property, Second properties
Posted on 31 August 2009
Hi we have a house worth £380k and mortgage left to pay of £195k. We would like to buy a holiday cottage to let in Ireland for £130k do you think we will be able to get a mortage based on the equity in our house? And if so what are the best current optins? Our current combined salary is £78k
Claire,
From the figures you have given this should be possible, providing neither of you have significant other financial commitments,. Such as an unsecured loan or credit card debt.
For a couple on your joint income it should be possible to borrow at least 4.5 times your income, which would be more than adequate. However, the cost of a new mortgage increases rapidly if you borrow more than 75% of the property value and it is very expensive to get a remortgage over 85%. I am assuming you have no early repayment charges on your current mortgage but if you do you may be better off asking for a further advance from your current lender rather than remortgaging.
If you would like more detailed advice we will need more information and so please call one of our consultants on 0800 71 81 91.
Categories: Buying abroad, Raising capital out of property, Remortgaging, Second properties
Posted on 12 March 2009
I HAVE A MORTGAGE FREE PROPERTY WORTH(340000) AND WANT TO RELEASE MONEY AGAINST IT(10000)TO BUY ANOTHERPROPERTY.N.ROC SAY YES BUT NO TO LET IT OUT, I WANT TO DO THIS. IS THERE ANY COMPANY THAT WILL ALLOW THIS?
Many lenders will allow a remortgage where the additional funds are to be used as a deposit for a Buy to Let property. However, most have a minimum of around £25,000 for a remortgage.
If you are planning to take out a mortgage on the Buy to Let property you plan to purchase I suggest you consider borrowing all, or most, of the funds on your residential property as this will be considerably cheaper. It will still be possible to obtain tax relief on the interest payable providing the mortgage is set up correctly.
Categories: Buy-to-let, Raising capital out of property, Remortgaging, Tax issues
Posted on 6 February 2009
I have a property worth 140-150k.
I wish to buy a second property which needs renovated for 140k let to buy seems the right way but how do i raise the capital for self cert deposit now as i think the property will sell soon
From the limited information available your proposal only looks feasible if you have little or no mortgage on the existing property. Self cert mortgages are still available but the maximum loan to value would be 75%.
Categories: Let-to-buy, Raising capital out of property, Remortgaging, Self-certification
Posted on 2 February 2009
A potential route out of negative equity?
My husband and I have a Together mortgage with Northern Rock for £129,000, but since recent price falls believe our house to only be worth c. £110,000. Between us we earn c. £60,000 and can afford to pay our mortgage twice over (which we are currently doing) but are looking to expand our family and therefore need to move quite soon. We are considering buying a second house to use as our main residence, but don't think we'll be able to rent out our current house due to lack of equity.
Therefore, I wondered if it might be an option to buy a repossessed property at below market value, then sometime after completion, remortgaging to release funds that might be used to clear the negative equity on house #1, therefore enabling us to sell it? (e.g. house #2 bought for £130,000 with a 90% mortgage of £117,000; market value of other similar houses on that road ~£160,000, refinance/draw down equity sometime after completion to release the ~£20,000 needed to clear the negative equity in house #1)??? Is this just too complicated, and are there any lenders willing to finance such a move?
Many thanks,
M
Mary,
I am doubtful that your plan will work, firstly because buying as far below market value as you are suggesting is unlikely to be easy. Lenders are required by law to obtain the best possible price on repossessed sales, and to be able to demonstrate they have done so, and I therefore suspect that if you were able to a property at an apparent 20% discount to its perceived value it would probably need money spent on it to bring it up to that value. Secondly, although it should be possible to borrow in total up to about 4 times your combined income, this would only allow you to get another mortgage for about £120,000, and so even though borrowing £117,000 to buy the property should be feasible, it would take your total borrowing very close to the limit, particularly bearing in mind you would presumably be looking to borrow 90% of the enhanced value.
I think a more realistic solution to your problem is to persuade Northern Rock to give you permission to let your existing property. I have spoken to Northern Rock about your situation in general and although, as you are well aware, you are way outside their criteria for a Buy to Let mortgage, in particular the 70% maximum LTV allowed, they may consider giving you permission to let, but naturally will need more information than was in your email. Before they can consider this they will need to know what rent you could expect and at least an indication of how much you intend to borrow to finance your new property.
I therefore suggest you call Northern Rock and explain your situation and ask if they can help by allowing you permission to let, but insist on speaking to one of the underwriters. Don’t go into detail with the call centre staff as they won’t have the authority to take the sort of decisions you need to be made. If Northern Rock agree to do this on acceptable terms please then call us on 0800 71 81 91 so that we can discuss the options with you for a mortgage to finance your purchase.
I presume in your calculations of what is affordable you have allowed for the loss of income while you are on maternity leave and the subsequent increase in costs with a new baby.
Ray Boulger
Categories: Buy-to-let, Raising capital out of property, Second properties, Special circumstances
Posted on 16 May 2008
My mother had a fall recently and after several weeks in hospital she is now staying with me as I live in a bungalow. We are very overcrowded so it is not an ideal situation. Her house is on the market for 89950 which is a realistic price. There have been about 5 viewings in as many weeks but no offers. She has seen a flat that she really likes close to me and my brother which is priced at 97950. My question is, can we help in any way to get the flat until the house sells ? Is it better to remortgage her house (she will put it into our names if necessary) or get a remortgage on one of our houses. Mine is valued at 225000 with 80000 mortgage and my brother's around 400000 with small mortgage. There is no mortgage on her house but we are not too keen on letting it out if we can avoid it. Can you help ?
Categories: Mortgages in retirement, Raising capital out of property, Special circumstances
Posted on 25 February 2008
We would like to buy a house to renovate. Would a bridging loan be suitable? Or are we wasting our time applying? We currently have a mortgage with the Nationwide but we wanted to do this as a separate entity without releasing equity on our property (about £55,000). The figure we would be looking at would be around £100,000. Many thanks, Jess
Categories: Raising capital out of property
Posted on 18 February 2008
I currently own outright a property worth £165,000. I earn between £35,000-£40,000 per annum and am looking to obtain a BTL property. I could command about £400-£450 a month in rent for the location and would like this to pay a prospective mortgage. Any advice?
Categories: Buy-to-let, Raising capital out of property
Posted on 9 February 2008
We have planning permission to pull our house down and build 3 instead. Can I raise a mortgage on the existing house to fund the development (we have no mortgage at present)? If so, what % of the existing house value could I raise?
Categories: Raising capital out of property
Posted on 8 February 2008
Hello there, I have inherited a property that needs a considerable amount of work and funding. I am trying to work out whether to borrow money against my own property or the house I have inherited? The collateral in my house is about £135,000. In the house I have inherited, the beneficiaries need paying off as well as the refurbishment which totals about £160,000. The house would be worth in the region of £310,000 when finished. Unfortunately I have stripped the kitchen and bathroom from the property and I am told you can not get a residential mortgage on it now? is this right? Any ideas Katie would be appreciated. Regards, Steve Russell
Categories: Raising capital out of property
Posted on 8 February 2008
Hi Katie, my husband and I have just recently moved back from the South of France, we have bought a property with no mortgage but we need to up date the kitchen, bathroom etc. Is it possible to get a small mortgage of about £20,000 - £25,000 for about 6-10 years and what lenders would do this? I'm 59 and my husband is 61, I have a small part time job which works out about £4,000 per annum and a £10,000 pension from my previous job which was with a bank. My husband has just started part-time with a company which is commission only and is hoping to get another job in the very near future. Joy
Categories: Raising capital out of property
Posted on 21 January 2008
My husband and I would like to buy a property to renovate. We own a house worth £300,000 with a £25,000 mortgage on, its less than that now it was 25 when we took it out 3 years ago. Between us we take home about £32,000 a year. How do we raise the money? We need to borrow £187,000 to purchase the property and renovate to sell on. Raising the money is the problem we don't know where to start.
Categories: Raising capital out of property
Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not neccessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.
We recommend you seek professional advice with regard to any of these topics where appropriate.