Hoping someone can help.
I was wondering if there is a way where I can borrow money against a rental.
I wanted to give my kids money for house deposits but don’t want to do equity release on my own house.
I have a rental worth about 150k . Wanted to take out about 30k, anyone have experience of doing this?
Approach current lender if mortgaged for additional borrowing. Or just take out a mortgage if own outright.
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Thanks, got no mortgage on it so I’ll have a look at who’s offering good rates.
Wanted to do something where money got paid off when you pop your clogs but can’t do it with a rental.
Standard ‘Buy to Let’ Mortgage. You can borrow for any reason accepted by the mortgage company.
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there may be tax implications if you gift the money to your children and then “pop your clogs” as you put it within a certain timeframe. Might want to look into that.
I’m aiming for at least my pension age and that’s 11 years away so hopefully I’ll be ok.
To be fair they won’t mind paying the tax, after they’ve sold the family home they’ll be quids in😂
Clare11, if you were to pop your clogs before the debt was repaid, why do you think it should be written off, or am I misreading your comments?
I was thinking of something like an equity release.
My friends grandad borrowed money from his property and when he passed years later and his property sold some of the money was given to the equity release company.The property had increased in value so there was still plenty left over. They needed to pay a lot more than he borrowed but the money was used when needed.
Unfortunately it’s not possible to do equity release on a rental property.
I don’t want to borrow against my home as I will probably downsize in the future and I don’t want to run into any issues with that.
Both properties have no mortgage. It seems a shame to have money tied up in property when my children could do with it now for their own deposits.
I’ve obtained a Let To Buy mortgage on a rental property in the past using a mortgage broker. Brokers can often ‘swing’ things for you. You would, of course, have to pay it off at some stage.
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Thanks for that- maybe that’s the way to go.
I have been looking on line for best rates, if I have to pay it back now it would be paid from the rent so shouldn’t be a problem as long as the payments aren’t too high as I have kept the rent a lot lower than others in the same area.
Just as well you didn’t go equity release it’s one way of getting rid of the equity in a property-the loan is not paid until it’s sold usually on your death so could be 30 years of interest on your money borrowed
Get a simple but to let mortgage it would cost around £260 month over 11 years and then it’s finished.
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Very simple. Most home mortgage lenders have an option for borrowing against a letting property known as BTL (Buy to Let).
The LTV (loan to value) depends entirely upon your letting income for affordability and obviously the value of the property. Not sure nowadays what the maximum permissible percentages are and will likely vary between lenders. £30K against a value of £150K, i.e. 20% LTV would be a walk in the park with such low leverage and achieve the most favourable rates.
There are some commercial BTL lenders, e.g. Paragon, Mortgage Works. In the past I’ve used a very good broker Chris Longhirst of Mortgages for Business who can sometimes get a better deal and more lenders to choose from as the brokers are sometimes offered broker only products.
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