BTL funded by money raised against existing home, paperwork query

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    BTL funded by money raised against existing home, paperwork query

    A peson has a mortgage on their house. They receive a lump sum and decide to fund a BTL. In order for the domestic mortgage interest to count against rental income as the funding for the BTL must they go through the paper exercise of refinancing? Or can they just account for this on paper?

    I hope this is clear?

    pm
    Before acting on forum advice, you may wish to consult an expert, someone who has all the relevant facts, and who accepts liability for their advice.

    #2
    The purchase of the BTL has to be traceable to your mortgage provider. Using the Lump sum does not make the interest on your home mortgage deductible from the rental income. Regards Peter

    Comment


      #3
      Thank you Peter.

      pm
      Before acting on forum advice, you may wish to consult an expert, someone who has all the relevant facts, and who accepts liability for their advice.

      Comment


        #4
        Yes, you need to pay down the mortgage and then subsequently refinance. I suggest a polite wait between the two events.

        Comment


          #5
          The lender suggested submitting the letter regarding new finance on the day the mortgage is redeemed. This appears to me to be too be soon. There could be a couple of weeks, although this will be very close to completion.

          This is a paper exercise, but the borrower will have complied with the process to satisfy the criteria.

          thank you for your input TaxationPete and Telometer.

          pm
          Before acting on forum advice, you may wish to consult an expert, someone who has all the relevant facts, and who accepts liability for their advice.

          Comment


            #6
            You have lost me, What letter and why are you redeeming a mortgage.
            Regards Peter

            Comment


              #7
              My apologies the post to which you refer is misleading.

              The mortgage is not being redeemed, just overpaid pending a drawback.

              regards

              pm
              Before acting on forum advice, you may wish to consult an expert, someone who has all the relevant facts, and who accepts liability for their advice.

              Comment

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