Do you remortgage your buy to let assets?

Discussion in 'General Property Investment Discussion' started by Longterminvestor, Oct 12, 2018.

  1. Longterminvestor

    Longterminvestor Administrator

    In theory, if you are a successful buy to let investor then as your equity increases in one or more properties, surely these funds could be better spent expanding your portfolio? Therefore, I would like to ask the question, do you remortgage your buy to let assets on a regular basis?
     
  2. Karen R

    Karen R New Member

    Many of our clients remortgage regularly. There are various reasons for this and most of them ask us to manage this for them (we are brokers), essentially when redemption periods end on current finance it makes absolute sense to review the portfolio or when fixed term rate periods end or perhaps the landlords financial position changes and they need to raise money or release money for various reasons whether that be further investment in property, refurbishment or repair of existing property or cash flow for other business or perhaps they want to build something or pay a tax bill. The reasons are many. Not all our clients have all properties with one lender either, in fact few do, in one case, a client has 14 buy to let properties and 3 are with one lender, 8 with another and the remainder are all with individual lenders. It makes sense to constantly review the products you have and the rates and terms as if you can better these by refinancing you can often save substantial amounts of money and you also build a great repayment history with more than one provider.
     
  3. FWL

    FWL Member

    This is akin to those who do not review their car insurance each year - there are often much better deals out there and in the modern era there is not half as much paperwork or hassle. Being lazy will have cost many property investors thousands of pounds over the years.
     
  4. Longterminvestor

    Longterminvestor Administrator

    I think many of us will look back in 10 years time and wonder why on earth we didnt make full use of historically low interest rates. Then again,with this Brexit mess who knows where rates will be in a decade :)
     
  5. Dan Veo

    Dan Veo New Member

    Yes you can remortgage and use some of the equity as a deposit to make your next buy to let purchase. This is a common strategy used by property investors to grow their portfolios.

    If you take this route, the lender will instruct a valuer to formally establish the present value of your existing property which will determine exactly how much equity you have to play with. You will have to pay for this valuation.

    Alternatively you could ask your current lender for a further advance on your existing mortgage. Again, the lender will require that your property is formally re-valued.

    Talk to a specialist buy to let broker who will be able to help you work out which route makes the most financial sense.
     
  6. The idea of continually using equity to raise funds for the next property deposit is a good one. However, there is always a danger of over extending yourself and seeing it all come crashing down. ALWAYS ensure there is enough headroom between your assets and laibilities.
     
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