The Question
I have two homes – a residential which is mortgaged and in which my family and I live and a buy-to-let. We have decided to sell the buy-to-let as we have some debts to pay off. The process was going reasonably well until the buyer pulled out at the eleventh hour.
We are now back to square one and looking at the prospect of having to re-market the property and go through months of conveyancing. We need the money we were expecting to gain from the buy-to-let sale urgently as we have some urgent bills to pay.
Can we get a short-term loan secured against our home? If so, how quickly can we do this?
Darren’s Answer
Thank you for your question and I am sorry to hear the sale fell through. This can be a frustrating time and I understand why you are exploring alternative options.
Regarding the additional borrowing, there are a few options for this.
One specific option is to look to remortgage the property with additional borrowing to repay your debts and credit commitments as you outlined. This will be subject to the lender’s criteria for amount and term based on your age and circumstances.
In addition, the amount you can release from the property will be based on the overall loan-to-value, which is the value of your property and the outstanding mortgage balance.
Please note that many lenders will use the rental yield from the property to determine the maximum amount affordable, this often doesn’t consider your salary or personal outgoings.
This can be favourable for you as this will not be subject to the same affordability calculations as a residential mortgage.
We recommend speaking to a mortgage broker who specialises in buy-to-let mortgages and can guide you through the process. They will be able to review your rental yield, affordability, loan-to-value and can look at the amount you will be able to obtain as additional borrowing.
Meet our expert…
Darren Polson is head of mortgage operations at Aberdein Considine. He has been writing a regular column for What Mortgage for over two years and is now here to answer YOUR questions.
If you have a question for Darren please email kate.saines@emap.com or leave a message in the comments below.
