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  • Mortgages & Finance

    Sub £25k remortgages possible?

    Hi All,

    We have 8 BTLs on repayment mortgages with an average balance of £35k. Within a few years some of them will be below the £25k mark and the existing fixes will be up.

    Looking at the long term when doing any remortgages (no further advances required) will it still be possible to find many providers? I ask because every time I look at the minimums of providers it's mainly £25k.

    Thanks in advance for any info.

    Fab

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    It is possible but it limits your options. You are getting into the area of "micro-mortgages".

    Mortgage lenders either pull out below £25k or start questining there returns and charge higher rates.

    You should talk to a mortgage broker such as at Bespoke Finance on 08009202001 or email hello@bespokefinance. As it may make sense to consolidate your mortgages.

    Having a few instead of 6 mortgages, leaving the other properties unencumbered. May be a way of keeping properties with the main steam lenders, it may also have the benefit of lowering fees - intead of 6 arrangement fees, valuation fees, broker fees, etc..

    It can also assist you to avoid the new PRA Portfolio Landlord rules requireing tougher tests and more paperwork.

    There are also a few lenders that will do "cross collatoral buy to let" - so they could for instance give you one mortgage but have charges accross all six properties giving them property. Put simply instead of six £25k loans, they will give you 1 £150k loan.

    Minimum Loan:
    TMW: £25,001 (min property value £50k)
    BM Solutions: £25,001 (min property value £40k)
    Precise Mortgages: £25,001
    Fleet Mortgages: £25,001
    Vida Home Loans: £25,001
    ... So as you can see it starts to limit options.

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    _________________________________________________________________________


    My posts are not financial advice, just a rambling guy passing time on a coffee break.
    The team at Bespoke Finance offers advice, including Limited Company Buy-to-Let , HMO Conversion and Cheap Life Insurance.

    _________________________________________________________________________


    Hello Fabio,

    You are correct, the lower the mortgage value to less options you have in respect of lenders. As Adam rightly says, consolidation of mortgages and creating unencumbered properties could be a good option.

    If you'd like a free portfolio review then please do contact us  https://www.propertytribes.com/free-portfolio-review-and-spreadsheet-t-127623194.html



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    You can contact me via Direct Message, or 07788 219647 or call the team on 01206 654444 for personalised quote and advice


    Fabio, because you have 8 mortgages on 8 properties (irrespective of how low £-wise they are), you would possibly incur 8 val fees, 8 solicitor transactions, 8 lenders arrangement fees etc etc.

    We would suggest that you consolidate in to the most financially cost effective portfolio strategy, whether that means 1,2 or 3  (and under the new PRA rules I would suggest that 3 mortgaged properties should be the optimum for you if possible) deals.

    4 or more mortgaged properties will mean you have to deal with 'specialist underwriting' as a 'portfolio landlord' borrower.  3 or fewer means you escape this new cumbersome process.

    Property Tribes Financial Services (available via PT's menu bar above from the 'mortgages' link) can help you to plan this properly.


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    To be fair, as you currently have 8 mortgaged properties you will have to go through the cumbersome process of specialist underwriting as a portfolio landlord anyway.

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    Thanks for the info guys. Some thinking for me to do.

    I have some mortgages with TMW that I used their switching service last year. On those ones I plan to stay with them and when they come to the end of their fixes then simply stay with them and switch to one of their deals. Can you foresee any issues with some of those mortgages being under £25k?

    Fab

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