Ex Pat Capital Raising for a second property

Posted on 5 April 2010 by David Backholer


I purchased a property around 5.5 years ago for £150k, of which I have remaining mortgage of £92k and 19.5yrs left. It is a repayment mortgage with monthly payments of around £520. I suspect there has been little change in the value of my property, although it may possibly be nearer to £160k.

2 years ago I moved to the States, so the property is now rented out for £700per month before management fees (£615 p/m after fees) and maintanace. (approx £1,100 per annum).

 I am now thinking about my next financial decision and purchasing a second property to let is a tempting idea.

 If I remortgage my current property for the maximum amount, how much cash could I free up?

 If I just used this cash as my deposit on a second buy-to-let property, what would be the maximum value of this property?

 Are there any restrictions I need to be aware of living abroad? I am a legal UK citizen, although I have no plans to live in the UK again.

 Many thanks for any help you can provide, I expect I will reach out to one of your brokers once I have decided what to do!

David

I would expect you to be able to raise up to 70% of your property's value. Based on a value of £160,000 with an outstanding debt of £92,000 this would allow you to release £20,000 towards the deposit on a second investment property.

Unfortunately, unless you have additional funds available, this doesn't really give you enough. Based on a deposit of £20,000 the maximum property value you would be looking at is £66,666 and this will severely restrict the properties you are able to consider. So much so, that you may find that they are either not suitable for letting, not a good investment or not suitable security in the Lenders opinion.

 Peter

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