Posted on 20 April 2014 by KB
I have a mortgage worth £150k left on my first home currently worth around £250k. I want to take out a second mortgage for a second property (buy to let). I am considering this second property or be around the £200k mark. Am I able to use the equity I have from my first home, say, £50k as a deposit for the second home? Will that be allowed? I do not have any savings I want to use as the deposit.
We can certainly look at raising an extra £50,000 on your current property. We could look at either a further advance with your existing lender, a remortgage to a new lender or a second charge loan. This would take the loan to value to 80% which may rule out some lenders, but as long as you meet the lenders new affordability critera then I'd like to think this could be done. With regard to the new Buy To Let, this would put the loan to value at 75% (£150k on £200k), however a large part of a lenders Buy To Let decision is the rental assessment. Most lenders require the rent to cover the monthly mortgage payment at 125%, based on a notional rate of 5%.
If you'd like to discuss your options in more detail, then please contact one of our consultants on 0344 346 3672 and they'll be able to give you a clearer idea of how we can help.
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