Raising capital from a rental property

by Readers Question

9:53 AM, 5th February 2016
About 4 years ago

Raising capital from a rental property

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Raising capital from a rental property

I own a 2 bed rental property that I would like to raise capital from by taking out a buy to let mortgage. I have a good tenant who appears to be a long term prospect. Raising capital from a rental property

This is new territory for me and I’m not sure the best way to go about arranging a buy to let mortgage on a property that I already own.

Should I use a broker or go direct to a mortgage provider?

Also, the property is of low value (£45k) and I believe this might cause difficulty.

The property value is in keeping with the location and not due to poor quality maintenance or decor etc.

Are there any buy to let mortgage providers that are open to mortgaging a property of this value?

Any advice or thoughts would be much appreciated.

Thanks in advance.

Lisa



Comments

Neil Robb

19:00 PM, 8th February 2016
About 4 years ago

Reply to the comment left by "Alison King" at "08/02/2016 - 18:11":

Hi Alison

It will show on your credit file as being turned down. If you have a failed application.
For £150.00 to have someone find me the correct mortgage no fees etc then I see it as good value.
Some mortgage company's are starting to look at how many mortgages you have and refuse by using my adviser I can get the maximum amount.

Howard Reuben CeMap CeRER

19:20 PM, 8th February 2016
About 4 years ago

Great point about looking at comparison websites, and Property118 has already helped out the community by offering exactly this service for all site visitors here > http://www.property118.com/mortgage-sourcing/

The results show lenders names, product details, fees and charges and, yes, whether it's intermediary only or not.

And this actually is one of the 'free' services that my Firm has provided for Property118 to offer 🙂

But, we do offer it with a caveat, only a full Fact Find discussion with a professional mortgage adviser will actually determine whether you are eligible for the products listed. The online system (in fact none of them) will ask you about your future requirements, the flexibility you may need, the way to present your case to an underwriter etc.

So, use an online system by all means ... in conjunction with a Broker.

Alison King

20:56 PM, 8th February 2016
About 4 years ago

Reply to the comment left by "Neil Robb" at "08/02/2016 - 19:00":

When I have arranged my own mortgages it has been a two-stage process. The first is a general discussion to establish suitability. Only after that hoop has been jumped through do we get onto credit vetting and property valuation.
I would also advise anyone to manage their own credit rating. I get a free monthly report from Noddle. If anything unjust appeared on there I would be onto it like a shot.

stuart edwards

22:20 PM, 8th February 2016
About 4 years ago

Reply to the comment left by "Joe Bloggs" at "07/02/2016 - 22:52":

I too agree with Joe. I have bought both with broker and without.....and have found in both cases I ended up doing most of the leg work. With regret....when it comes to finance there are far too many middle men. I only go with no fee brokers now.

Alison King

22:51 PM, 8th February 2016
About 4 years ago

Reply to the comment left by "stuart edwards" at "08/02/2016 - 22:20":

Like any subcontractor I've found it's necessary to supervise the broker and check the application form in microscopic detail. Broker howlers that have bitten me include £75 entered in the expected monthly rental income box, "freehold" instead of "leasehold" and insisting that the monthly rent must exceed the monthly payments by 125% on a repayment mortgage.

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