Mortgaging existing BTL to buy another — will I effectively be cash buyer?

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    Mortgaging existing BTL to buy another — will I effectively be cash buyer?

    Hi there, good morning. First post and I hope this isn't too basic a question.

    I have a BTL which I've had for more than 10 years now, and no longer has any mortgage. I'm part way through applying for a BTL mortgage on it in order to raise funds for a new BTL. My question is, will the release of funds be contingent on the purchase of the new property going through, like it is with a conventional house purchase? The new mortgage won't be secured on the new property, so I had assumed that the funds would just be released when the application is successful but they are asking for full details of the new property. Thanks for any info. Would obviously be helpful from a negotiating point of view to be a cash buyer.

    Cheers

    #2
    Lenders are required to be much more diligent than they used to be.

    If you've told them you plan to purchase a new property, they'll be interested in it as it's going to be part of the income you use to pay them.
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

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      #3
      Whenever I've re-mortgaged I've always received the funds to do as I please with. However, things have changed a lot since I last did this.

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        #4
        Thanks both, looks like I should proceed and see what they say. The affordability is based on the rent on the existing BTL alone, or that's all the information they've asked for in the application so far at least. Really appreciate your quick replies, thanks.

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          #5
          Many lenders will accept at face value the declaration as to what the monies are for , others however do make the funding contingent on a new property transaction being processed with evidence of such being provided.

          If you can disclose the lender I will gladly research and let you know if only to assuage any concerns on your part.

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            #6
            You are only a "cash buyer" if you have "ready cash funds in your bank account" to pay immediately.

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              #7
              The one time I did this I had already been turned down for a mortgage on the property I wanted to buy by the same lender (the only one who would lend to me at that time). So they already had all the details.

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