When our client came to us, she had a main residence and a buy-to-let (BTL) and was looking to add an additional BTL to her portfolio.
This case presented a number of difficulties:
- Our client had no cash whatsoever with which to achieve her ambitions; she therefore needed us to provide a method by which she could realise her goals
- She also needed to raise funds to cover stamp duty and renovations on her desired BTL
- Additionally, she wished to place as much of these mortgages on interest-only as possible
Our broker recognised our client’s existing BTL and the equity within it as the key to solving this problem and so began working through possible solutions with our client. The solution they eventually landed on was as follows: they would remortgage her current buy-to-let property, remove equity from this property, and use this cash to fund the necessary renovations and put down a deposit on the second property.
Once this method had been decided on, our broker went to market, looking for mortgage products that would allow this plan to be put into action while also looking for ways to keep our client’s monthly costs down to a minimum.
Although most lenders are unwilling to offer interest-only repayment strategies on high-LTV mortgages, we were in this instance able to secure our client two interest-only BTL mortgages, allowing her to minimise her monthly mortgage costs and thus maximise her monthly net rental income.
Both of the mortgages we arranged for our client were interest-only, five-year fixed 80% LTV loans with rates of 3.75%. The first was a remortgage on her existing BTL property; the second was a mortgage on the new property.
Ultimately, our client was able to purchase the property she desired, and she is currently in the process of making the necessary renovations to this property. Once this is complete, she will begin renting out the property and reaping the rewards of this bold investment decision.