Proof of deposit for BTL mortgage?
Hi,
I am in the process of buying a BMV property using BM as the lender.
I was going to use equity release from one of my other properties to fund the deposit but BM say they dont allow that now.......has anyone else come across this and know of any solutions??
I have been told that if I can find someone to 'gift' me the deposit then I can do the deal.
Does anyone know how this would work with a cash rich JV partner? I was previously under the impression that with a JV partner they would just give me the money and I would get the mortgage in my name, refurb+flip the property and then everyone gets paid from the profits..........however if BTL mortgage companies want proof of where the deposit came from then is it just a case of extra paperwork asking the JV partner to supply evidence that he has gifted it to me? Or is it a case of getting a joint mortgage with the JV partner??
I have always funded my own deals so not required a JV partner previously, but am now running out of cash so any help on setting up JVs would be appreciated too.
Thanks,
Neil
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15-07-2012 | 10:47
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Answers
17-07-2012 | 15:08
Hi Neil I am a Mortgage Broker John Armstrong, and I can not see why you can not release cash from other properties we do this all the time maybe you get someone who works weekends at BM ? If you would like to call us at CMS 0121 236 2882 we can go over your deal Thanks John
20-07-2012 | 16:10
Hi Neil
I would get your deposit funds available before applying for the mortgage. In the past I have used a credit card or got a short term loan from a friend or family. I have also got a family member to pay me back some money I lent them in the past for a short period of time before I lent it back to them again. However you need to check that out with a mortgage broker and/or the criteria of your mortgage lender.
Assuming the purchase is bmv enough to allow you to refinance in 6 months. Pay your family/friend back 5% to 10% interest on the full amount borrowed in 6 months time once you've refinanced the property. Or draw down the cash from an existing property and pay them back sooner at a lower rate if you can..
You may even find that your draw down from your existing property is available before you even complete the purchase so the short term loan or credit card funds are just a safety net. You normally need to provide proof of funds, so to repeat, I would get your funds in your account before your are asked to provide proof of deposit and how you came by it. That will allow you to say the funds are your savings that are in your Bank account.
Thanks,Jason.
03-08-2012 | 09:31
Thanks for all the replies they have been very helpful. I managed to borrow the money required from a relative and will pay them interest. Looking to flip this refurb deal in 6 months..........I understand its difficult for a buyer to get a mortgage if the seller hasn't owned the property for 6 months? I will be starting a blog soon of my refurb deals with pictures so you can all have a look.
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See how you can earn 12% return on your investment. Visit www.neilanglim.com
Hi Neil are you using a mortgage broker for your investment property purchase?
Re: JV partners, find the type where ideally you can buy cash and do deals that way. You will do less of them but you will find the process smoother