UK Landlord Forum / Life

Hi I am new to the forum and also looking into becoming a landlord.

I am looking at mortgage options and was wondering if I can use my existing house as some form of collateral to reduce my deposit required and to have a repayment mortgage rather than a typical BTL interest only because I would like to pay off some of the capital as we go forward.

Has anyone done a similar thing? Any help would be very much appreciated.

Many thanks

Remortgage it, buy the property to let for cash eventually remortgage that..?

Please be careful of advice received from websites (including my own) and always do your own research.
Obviously I cannot understand your full situation from a small blog....

Remortgage your existing property.
Consider Residential Offset mortgage best for flexibility ..have a look at First Direct (but use a no fee all of market independent broker like L&C)

Get a BTL mortgage if you need but don't just disregard interest only BTL.
Most have the right to pay down 10% per year...you get to keep the decision of whether to pay down or not which you don't with a repayment...depends if you are disciplined.

Plenty of options this way to optimize tax position especially if there is a wife is involved?

Best of luck

We do this. All our rentals have been bought using money raised through our residential mortgage. First Direct are excellent, very flexible and good value.

Almost the same as myself as well..   re-mortgaged my existing house, and used this with an additional BTL interest only mortgage to raise enough money for the purchase..  can overpay 20% on the re-mortgage and 10% of the BTL mortgage annually...

Will pay off the re-mortgage first, to allow another re-mortgage in future, should I desire.

Quote from: theangrylandlord on September 19, 2015, 01:26:33 PM
Please be careful of advice received from websites (including my own) and always do your own research.
Obviously I cannot understand your full situation from a small blog....

Remortgage your existing property.
Consider Residential Offset mortgage best for flexibility ..have a look at First Direct (but use a no fee all of market independent broker like L&C)

Just a warning about a certain fees free broker.  Having recently done a straightforward BTL remortgage for us, this one left us high & dry on a subsequent purchase, actually committed to a Scottish purchase.  The broker had failed to fully examine the lending criteria of a particular lender and maintained that there was no-one who would lend to us, this being five weeks into the transaction and three weeks before scheduled completion.

A complaint was duly lodged, but the supervisor who rang me said that it was impossible to consider everything a particular lender looked for, as their requirements ran to "hundreds of pages".   I pointed out to him that was absolute b*ll*cks, as I had already checked the lending criteria on the lender's broker website and the requirement we fell down on was clearly there for all to see on page 2 of the 2-page guide for brokers. 

We subsequently found a small brokerage who sourced a lender with a better rate and with lower fees, which with  the £495 we paid them, was still a far cheaper alternative to the fees free broker.  The offer was with us within three weeks and we completed, without penalty, just a couple of days late.

Ironically, the original broker came back shortly after our complaint, having miraculously identified the same lender as the second broker.

Pay peanuts, get monkeys!

PS....I am a retired broker of many years experience myself, but foolishly presumed that I would be afforded the same level of due diligence as I used to give to my own clients.   

TDA sorry to hear about your strife..
Just to clarify I only indicated to use a no fee broker because ridiculously the mortgage companies like to palm off application liability to these firms (much like your case) and so the brokers get access to rates and deals that you or I wouldnt get (you being a former broker probably know this alreday).

However I would never trust any of the following (in no order):
a mortgage broker; letting agent; tax man; council worker; tenant; BG engineer; plumber; locksmith; roofer; electrician; bank worker (any level); politician; anyone carrying an axe; acccountant; solicitor; insurance broker; bailiff; or judge - -always triple check everything yourself and if you can do the job yourself then do it. 

If I was being harsh I would suggest you being a former broker might have done more due dilligence - but maybe you were more trusting than you will be in future...

Over the years have succesfully (sadly) got recompense for shoddy work from:
1. 1 x agent
2. 7 x banks
3. 2 x insurance companies
4. 3 x solicitors

Sometimes when buying a property we are "forced" by the estate agent to use their mortgage broker which has never worked well (usually involves daily phone calls with me shouting at one end).  With a mortgage broker I find the following question immediately sorts the chaff from the soil..."Whats the ERC?"  You would be gobsmacked to know how many times the response is "Sorry, what do you mean by ERC?"

I only deal with one guy at L&C and even then I won't deal with him unless he allocates the case to one specific expediter/case manager as she really does her job well.

Doesn't the first mortgage broker have a regulator/formal complaints procedure??....lawyers are scared sh!tless of complaints to the law society and banks etc are immediately £500 in the hole when you make a complaint to the FOS and sometimes its easier and cheaper for them to settle than pay the fee and admin costs...

You may have more power than you think..

Best of luck