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I've just exchanged on my first BTL in Liverpool with completion due Q4 this year and am thinking about considerations for when I want to expand my portfolio, potentially next year, particularly related to the BTL mortgage i get for the Liverpool property.
I will have a 60% LTV BTL interest only mortgage on the property. I have heard of refinancing and releasing equity to make the next purchase so if I was originally planning on getting a 5 yr fix for the security of it, I assume I'd be wise to get one with no/low early repayment charges if I knew I wanted to make another purchase before 5 years? Or better..just check if they offer further advances then I could keep my 5 yr fix and get a further advance for the deposit on the next property?
Any other thoughts/recommendations?
Hi Elliot,In order to release equity, one or both of two things would have to happen:1. The property increases significantly in value.2. The rental income increases.It is unlikely that either of these things will happen with one year in the current market conditions imho, unless you force the appreciation of the property through refurbishment or development.Perhaps opt for a three year fixed mortgage to keep your options open?As well as a further advance, or re-mortgage, you can also release equity through a second charge loan, but that is usually the most expensive option.Hope that helps?
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Why don't you take a 75% ltv that would release your current cash rather than needing to refinance
Slowly working towards financial freedom
I dont think it would work because of the reason Vennesa has outlined
If you want to build a strong porphioio save for a depot it may take longer but its safer
The days of Remortgaging a new purchase within a one year are over to raise a deposit
Learn Change and Adapt ?????
All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.
Saving's is the best option from all available funds you can save from, reinvesting profits etc. I feel with Liverpool it will be a min of 5 years before you can raise enough to put to another one of course depending on the house price.
With a 60%LTV you possibly might get a further advance but that depends on whether the lender will offer that to you or not.
Or a second charge / secured loan facility might help you to release the required funds.
Or if it's viable then a capital raising remortgage might indeed be the answer.
There are BTL mortgage lenders on our panel that lend up to 85%LTV on BTL properties.
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Thanks all, some useful food for thought!