CASE STUDY: MR BRITTON
Here is Mr Britton, he is:
• 75 years old
• He has a buy to let property that needs updating and improving.
• It is worth approximately £300,000
• He hasn't got the cash to pay for renovations.
Mr Britton has been renting out his buy to let for a number of years and it provides him with a big proportion of his income. It now needs a new roof and the electrics need updating and Mr Britton does not have the cash to do this. By renovating the property he hopes that it will be more attractive to tenants and he can in turn increase the rent.
Mr Britton does not wish to use equity release on his own home and would like to re-mortgage his buy to let property.
Here is a video from one lender that summarizes how equity release can help:
Mr Britton could use equity release lifetime mortgage to release monies built up in his buy-to-let property.
There is a range of buy to let equity release mortgages that will allow Mr Britton to release some of the money he has built up in his buy to let property. As with all equity release mortgages, how much he can release depends on his age, how much the property is worth and how much he wishes to borrow.
In this case he was able to borrow 39% of the value of his property which worked out to be £117,000, far more than he actually needed. He decided if he needed to borrow additional funds at a later date he would apply for a further advance and understood that this would be dependent on meeting the lender's lending criteria.
With a buy to let equity release mortgage, the amount borrowed (along with any charges or interest accumulated) will usually be repaid at the time of his death, commonly using the cash generated from the sale of his property. He will always retain ownership of his property, and it will never be repossessed, as long as he abides by the terms and conditions of the loan.