Reason needed for remortgage equity release?

[Adam Kahn]

I am trying to remortgage a buy-to-let property I own in order to release equity from the property.

I would be releasing around 80k from the property.

But my mortgage broker has said I need to give a reason for why I want to release equity from the property.

I wasn't aware providing a sufficient reason was a requirement when releasing equity from a property you own. Surely so long as I ensure the necessary amount of equity remains in the property (25 - 40 percent) and can demonstrate I can cover payments (either myself or via rental payments),then whatever reason I need it for should not matter.

I'm actually taking equity from the property because I don't feel holding investment property in the london is as profitable as it was and want to diversify. This could be in other property ventures or other types of investments - I have not determined a precise investment strategy yet, but my current mortgage deal has come to an end so I'm releasing equity now.

So my question is - in the eyes of a broker/lender, what reasons are good enough reasons for why someone can withdraw equity from their property?

Thanks

 

[PostBrexitInvestor]

Diversifying your investments is a perfectly good reason. If the rent on your buy to let property covers your re-mortgage payments then I dont really see an issue. I am suprised your need to give a reason - you might want to buy a car, repay a debt, what has it go to do with the mortgage company as long as you remain above the relevant equity limits and you have means to cover your mortgage payments.

 

[nmb]

Is it normal for your mortgage provider to ask why you are looking to remortgage - assuming that you have the correct income and equity in place?

 

[PostBrexitInvestor]

How many people give a 100% honest answer when applying for a loan and they are asked what it is for? As long as the financials add up, and you can afford the repayments, what is the issue?

 

[diyhelp]

How did you get on with you mortgage application - what answer did you give them in the end?

 

[FWL]

Has anyone else ever felt under pressure to justify why they have remortgaged a property even though from a financial standpoint they can afford it?

 

[lookinginvest]

I can see why a mortgage company might ask the question but deciding whether or not to offer you a remortgage deal on the back of your answer is bizarre. You probably have stronger financials than the vast majority of first time buyers who have mortgages approved every day.