Advice

Q: How quick can I release money on my buy to let property

27 January 2012

A: There are several ways you can buy property, i.e. cash, mortgage, bridging finance. But getting your cash back out without selling?, there is only one real option, that is, you must have owned the property for at least 6 months!! But there are some simple steps you can take in making sure you maximise your opportunity of getting as much cash out as possible:

1. Before you bought the property, you should have done some DD or due diligence making sure that you were buying at the right price etc
2. But with the knowledge that you were wanting to release some of your hard earned cash at a later stage you need to make sure that the lender’s valuers’ feel the same way, find this out first!! & arrange for a private survey to be done by a valuer who is on the panel of the mortgage company that you are likely to apply to in the future for a re-mortgage or further advance. Do not disclose to them the price you are actually paying for the property, but ask them for a mortgage valuation report, if they ask if you have a particular lender in mind, tell them who it likely to be.
3. This survey cannot be used with your application to the lender in the future, but can be used a supportive evidence if needed for your application.
4. If the valuer agrees with you and values the property at what the open market value is, then great, this report will prove vital in the coming months and will be worth the extra expense.
5. With your report done and DD completed and you are happy, complete on the purchase and do whatever you need to do to rent the property out and then wait, wait 6 months from the date you completed and submit your application for a re-mortgage or further advance, you may apply for a decision in principal in month 5 as most lenders decisions are valid for 30 days or more.
6. *Month 6, application submitted to the lender, valuation is instructed, the valuer will look on the land registry to see how much you originally paid for the property, if you just bought a BMV property, then the report you had done privately will now be needed as more than likely the valuer will value the property similarly to the price you paid for it in today’s economic climate and submit his report to the lender accordingly, the lender reports back to you that the property has been down valued to a price near what you’ve paid for it, this is when you then submit your report to them and ask that their valuer re-considers his report based on the valuation that he had done 6 months previously, also supply them with details of 3 properties that have actually SOLD, this can be found on various websites such as:
7. , www.mouseprice.co.uk, www.landregistry.gov.uk, www.rightmove.co.uk, www.nethouseprice.com, www.upmystreet.com

Armed with all this information & evidence, the valuer should have no choice but to revise his original valuation figure and re-issue the report with the correct & current market value and the lender will issue a mortgage offer accordingly, hey presto you got your money back out of the property and on to the next property by repeating the above method.

There are now some scheme's where you can release funds within 6 months, details of these schemes will be released next week, to be the first to receive this information on our top tips, follows us on twitter or register to be on our mailing list

• The price of property can up as well as down and lending criteria can change during this time and a previous valuation report is no guarantee that the property will be worth this much in the future. All mortgage applications are subject to status and lending criteria at the time of submission.