A capital raising mortgage allows homeowners to raise capital, or release equity from their home. The capital generated can then be used, for example, to make improvements to their properties or a deposit for another investment property.
Regardless of whether you’re remortgaging or making a buy-to-let purchase, the process starts in the same way. You will need to send through an initial enquiry, which can be done online, over the phone, or via email. We will respond to this enquiry within 4 hours, and you’ll be assigned a dedicated underwriter. This underwriter will gather a few initial details from you to provide an indicative tier, rate, and loan size.
If you’re happy to progress, the underwriter will then need some paperwork from you to keep the ball rolling. Once we have what we need, we will issue “credit approved terms” in the form of a Decision in Principle (DIP). This DIP will be verified by our Credit Committee, and we’ll move to have this all completed within 24 hours.
When you sign the DIP, and cover the valuation and admin fees, we’ll move to have the property valued. Your assigned underwriter will work with you to agree to the best terms and timescales for your specific investment. The valuation will verify the details on which the DIP will be based, and our valuations are usually instructed within a day of fees clearing.
As we come to the final stages, solicitors will be in touch to issue contracts, and get the deal ready for completion. We only work with a trusted panel of solicitors who always work to complete as quickly as possible. During the legal stage and indeed, throughout the entirety of the lending process, you will be kept in the loop. If there any updates or if problems arise, you will be the first to know about it.
When everything is wrapped up, your capital raising mortgage will be ready to be put to use. So long as everything lines up during the assessment process, this could all be done within a week from your initial enquiry.
Remortgaging involves moving your existing mortgage for your property from one lender to another. The new mortgage will replace your old one. If you move from your existing mortgage to a new one with the same lender, this is usually referred to as a “product transfer”. Some people may refer to a product transfer as a remortgage, but technically a remortgage involves a separate lender.
There are many reasons as to why you may want to remortgage. Although, there are a few key examples that tend to drive remortgages. You may want to remortgage if you’re coming to the end of your existing mortgage rate. Mortgage rates are typically offered for set periods – 2 years, 5 years etc. As these periods end, homeowners may want to look elsewhere for better options.
Homeowners may also want to remortgage if they’re planning to borrow more money against their property. A capital raising mortgage can be used for this kind of plan.
Our buy-to-let mortgages can facilitate capital raising, so long as 40% or less of the capital will be used for personal reasons such as personal debts or improvements on your main residence.
Across the applications we deal with, few deals will look exactly the same, and every case is assessed on its individual merit. But, there may be some commonalities in how capital raising buy-to-let mortgages are utilised.
For example, say you own a buy-to-let property worth £200,000, with an existing mortgage of £50,000. You may plan to build an extension onto the property, which requires capital of £100,000. In this capital raising mortgage example, the total borrowing would amount to £150,000 on a £200,000 property – a 75% LTV. Subject to other requirements, we may be able to work with this.
How quickly we move will largely depend on your specific circumstances and how long the legal processes take. But, we pride ourselves on our ability to bring bridging like speed and flexibility to the mortgage market. We can issue funding within a week of an initial enquiry where everything lines up well. But even in more complex cases, you can have capital in mere weeks.
Yes, it is possible to move onto our buy-to-let mortgages from any one of our bridging loans. In fact, doing so could present a valid exit strategy for property investors and landlords.
