Posted on 1 June 2011 by edric reynolds
I went self employed approximately 7 months ago and own my property valued at £170,000 with no mortgage. I want to borrow £50,000 against the house to purchase a second property to rent/or sell dependant on valuation after renovations, where do I start?
The simplest way to raise the finance you need would be to borrow against your current residential property but you will find your choice of Lenders restricted because of your employment situation. Although you have less than a year trading it is possible that you would be considered for a mortgage if you were previously employed in the same line of work and if a Lender can see that you have contracts in existence or lined up to verify your current and future income.
An alternative to this would be Bridging Development Finance. This is short term lending and would probably be secured against both properties to be repaid either on sale or by remortgaging the investment property. This type of lending tends to have higher fees and interest rates but if it enables you to achieve an increase in the value of the renovated property then the benefits can outweigh the costs.
I believe we can help you and that you would benefit from speaking to one of our independent mortgage advisers. Please call 0344 346 3672 and tell the consultant the date and title of your question, they will then be able to offer further advice on your situation.
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 necessarily 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.