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  • Mortgages & Finance

    Remortgaging with extra borrowing

    I am in the process of remortgaging one of my properties, but have asked for 20k more than the previous mtg.

    The mtg company have asked what the extra is for and I said it was either to pay down an existing mtg when it's due or put towards the purchase of a new buy to let if I see one beforehand.

    They have come back asking for the address of this new property and whether it will be mortgaged.

    Even allowing for the fact that there is no property yet,  I think it's none of their business what the extra is spent on. With the extra £20k the loan is still only 60% LTV, so I don't understand why they need that info.

    Does anyone have any ideas?
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    We have lenders who won't ask questions like this.  Which lender is it that you've applied to?

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    NatWest are great for competitive rates but in order to avoid these kinds of questions, a specialist lender is best.  The rates are still good, we have a deal at the moment which is 1.99% fixed for 2 years with a lender that won't ask you for your life history. 

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    Some lenders prefer certain reasons for remortgaging.

    If the reason is to raise money to buy more properties, some lenders will need to see the new property that will be purchased.  It part of the money laundering checks.

    Some lenders are just a bit more tight than others.

    Maybe you should ask your broker to call the lender first and see if that is an acceptable route and if so, what is the criteria?

    If you need a hand or a chat, feel free to give me a call/email. Details below Smile

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    Financial Consultant working with Property Tribes Financial Services.

    BTL Specialists.

    Always cover your debts, don't leave them for your loved ones to pick up. Ask me how - austyn@ptfs.co.uk     07500 871209


    Believe it or not, some applicants have been known to lie on their mortgage application forms!

    Lenders need to be comfortable on the purpose of the additional borrowing; they are generally OK with property related requests so long as you are not raising cash for a Timeshare. 

    Some people are habitual Debt Consolidators, racking up credit card debt and consolidating it later on, or raising money for luxury cars or holidays. 

    This is not viable long-term, and the end result is inevitable repossession, which lenders really don't want to do, due to the negative press they'll get.  The original purpose of a mortgage is to enable someone to buy a property to live in, and they would say that should be their main purpose in life, and not helping to prolong the process to the borrowers detriment. 

    On a larger picture basis, lenders will not want to contribute too much to the nations overall borrowing profile, so look to mitigate that too.

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    __________________________________________________________________

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