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  • Mortgages & Finance

    Help with getting further advance

    Hi guys,

    Newbie to the forums. Can someone let me know if following is possible please

    I have a residential property that we live in that has a 70k mortgage left on it and value of house is around £530k. The £70k is a offset mortgage with YBS and I have £70k savings in a saving account linked to mortgage so in theory it's paid off. I just pay off a £1000 a month repayment mortgage.

    I want to release around £200k and put in a offset saving account on interest only and have that available when I might need it. I am hoping to use that £200k to buy a few more properties to add to my two existing BTL.

    Would YBS allow me to have further advance and what would you advise I tell them? Is it simply letting them know you want to buy a BTL and will they allow this?

    I have seen that providers will only allow further advance for refurbishment of current house and not anything else.

    I want to have this money available before Brexit so I can use if needed. I will not be paying interest on this until I use it. It will just sit in account.

    Let me know if this is possible pls since I want to call YBS this week and get ball rolling.

    Many thanks in advance for help

    Steve

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    Just give them a call. Much will depend on your personal circumstances.

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    Chartered Accountant, Tax Advisor and Mortgage broker

    (and BTL portfolio owner)

    stuart@johnsonsca.com

    02039077022

    Ok thanks , so just tell them exactly my plans as above and hopefully they be ok. Personal circumstances should be ok in terms of income

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    Income, credit status, LTV, reason for further advance, other debts and liabilities etc etc are all pieces of the jigsaw and it is only when the full picture is seen, that is when the bank will either approve the application, or otherwise.

    An honest and fully detailed application is the best way to try and secure approval

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    Hi Steve and welcome to the tribe.

    You have a significant amount of equity there that could be utilised another way imho.

    For instance, you could bridge against it, essentially becoming a cash buyer.

    The team at Property Tribes Financial Services would be able to assist you in this regards.  Well worth exploring imho, but also speak directly to your lender about accessing that equity, as it would be the less expensive option.

    See this thread for some further inspiration - The power of owning a property with no mortgage on it

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    Hi Steve,

    In short - yes – you should be able to do exactly what you want to do. 

    Borrowing money to fund a BTL purchase is a legal/approved use of funds for most lenders. Often in their marketing material they only mention a couple of things as possible reasons for borrowing and home improvements is the favourite.   have seen weddings and school fees mentioned before as well. So long as it is not for a tax bill, gambling debt or cash injection to a business you should be fine. 

    If not, unlikely but possible, then I would suggest looking at remortgaging to another offset provider. I would genuinely recommend a broker for that as not all offset mortgages work the same way and you have medium to long term plans that can become very difficult with the wrong type of offset mortgage.  Also the broker can help with the BTL purchases possibly, which are also not the easiest of mortgages to ‘self-source’. 

    Last bit of advice would be to look at what actual product you are on (or could be on) with YBS as there may be better products out there.  It doesn’t matter whilst you are offsetting so much but when you start drawing it down to fund the BTL purchases it will become far more critical to your income/expenditure.

    I hope this helps,

    Cat

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    Call the PT Broker Hotline on 0333 363 6507 or email us at ptbrokers@johncharcol.co.uk