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  • Property-a-holics

    Remortgage and release of funds

    I am looking to release funds from an existing property for the first time and have walked into a scenario I wasn’t expecting. I stated that I would use the fund for a house purchase - thinking I’d do that when I had an opportunity come up, armed with funds in the bank. However, the underwriter is asking for proof of an offer. Is this standard? Ideally I’d like to keep the money in my bank rather than with them... and not rush a purchase.
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    I generally only release funds to purchase other properties at auction and the lender has so far never complained. 
    It is so much better to have cash at auction. 

    I would just tell them that.
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    Graa, if you don’t mind me asking, do you actually find deals at auction? 

    I have been to several recently in London, they are jam packed and everything gets bid up to silly levels. I get better deals through the estate agents.
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    Deals at auction are hard to get by this day of age. On occasion I get a ok one. I have found the same that auction becomes silly money and have seen properties being sold at auction to a higher price than before
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    I just remortgaged (with Skipton), they didn’t want to see proof of offer on a property. I’m doing it for the exact same reason as you.
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    Thanks both. Barclays are adamant they cannot release funds without a purchase and mortgage in the pipes. I should have checked. But feeling frustrated. I see having the cash as part of a risk mitigation strategy against any market falls and the opportunity to act quickly if an opportunity comes up.
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    Plus the opportunity to make money through arbitrage by peer to peer investment in the short term.
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    Good morning,

    I use an offset mortgage product which works really well for this situation. The remortgage funds can be stored in a quick and easy to access ‘offset’ account until you need them. You don’t pay interest on whatever funds are in the ‘offset’ account. This means you can access money quickly but don’t have to rush in to buying anything. Speak to any good mortgage broker about this. Our lender (Scottish Widows) has no issue with us remortgaging with the intention of buying BTL properties.
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    Some lenders require you to have an offer on a property and others are ok with you planning on having a property. The Mortgage Adviser you used should have checked this with you, it's a common knowledge issue if you deal with property investors.

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    Yeah def an oversight on my behalf. Actually remortgaging directly with existing otherwise I think it would have been picked up. I don’t blame Barclays but is a problem for implementing my planned strategy.
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