This article will explore how you could raise additional funding on a property that was originally bought in cash or bridging finance. Any buy-to-let landlord would assume that securing a mortgage on a property you already own would be simple, but it isn’t always the case.
Lenders are rightly sceptical about where the money is coming from. They like to be in control of the facts and aren’t easily swayed by buy-to-let landlords operating like property developers. Many building societies will rule out lending to property developers entirely. If you have purchased a property with cash and want to remortgage in a short space of time, you can expect your application to undergo additional scrutiny.
The majority of lenders will have a minimum term before you can remortgage a property, including buy-to-let properties. It doesn’t matter if the property is mortgaged or bought with cash, lenders will want to see a 6-month gap between transactions.
There are a few lenders that will be willing to offer mortgage products with a shorter waiting period between transactions. These lenders will also work from the original purchase price, regardless of the work that has been completed since you bought it. There is always an exception to the rule, but the first step should always be to start a conversation.
It’s worth noting that the maximum you would be able to raise would be 85% of the value, so if you purchased a property for £100,000, you’ll only be able to access £85,000. This is to ensure your repayments will not exceed the potential rental yield.
To find out more about borrowing on a property you already own, get in touch with our expert team today. We can help you to find the right remortgage provider for your needs.