The Property Investor's Coaching Academy
Buy, wait 6 months and remortgage, right?
Buy, wait 6 months and remortgage, right? Not for long, you won’t! Why? Because the lenders hate you doing that, that’s why.
Make no mistake, the days of re-mortgaging to release capital (a la Mortgage Express) as a strategy are long gone.
Yes, you can do it, and get away with it, maybe three or four times, but eventually the lenders will get wise, and you find yourself blacklisted and unable to raise another mortgage.
Let’s face it, lenders make their money from you paying the mortgage each and every month. If you remortgage after six months they barely get their costs back. There are no costs factored in for the remortgage facility.
BTL Lenders hate BTL investors! Why? Because BTL investors use the re-mortgage facility as a strategy, and it is not designed for that. They think you are taking the p***. What the BTL lenders want is for you to put down your 25% deposit, then go away and pay your mortgage every month without bothering them.
And think about this:
Often your chosen strategy will involve buying properties using a BTL mortgage. That is fine in itself, but look at the criteria required by the lenders: they like you to be employed, with a regular income of at least £25,000 pa. What they don’t like is BTL investors!
Well, here’s why. Rightly or wrongly (and they are the lenders, so they can say what they like) they reckon that if all your income is derived from rents, you will have a problem, and have trouble paying their mortgage, if you suddenly lose all, or a large number of your tenants. (Yes, we know you will also have a problem if you lose your job, but hey, that is BTL lenders for you!)
The solution? Commercial funding.
Commercial lenders, in contrast, love BTL investors! The six month rule does not apply, either, so you can maximise profits.
It all makes sense!