However, all her cash is tied up in the portfolio, which has a total of £1.6 million of mortgages secured against it.
Buying opportunities keep passing her by because she is unable to release the cash in her portfolio quickly enough.
What are the options that would enable her to extract cash quickly on an ongoing basis from her business?
Sue Cox is business manager at Bananas Inc
Marion’s situation is shared by many buy-to-let investors – they are often equity rich, but relatively cash poor. This usually means that when opportunities come to their notice, a lack of ready cash prevents their taking advantage of them.
Marion has two options. The first would involve approaching a bridging lender and requesting a revolving second-charge facility across her whole portfolio.
In this way, a second charge could be taken on all of the properties in her portfolio and a sum released for her ongoing use. She would only pay interest from a bridger such as Cheval as and when she needed the money. Its rates start at 1.75 per cent per month.
Her second option would be to remortgage her existing properties with a conventional mortgage lender and, in doing so, release money. She could then keep the cash in an instant access deposit account and only withdraw it as and when she needs it.
Cath Hearnden is director at My Mortgage Direct
Marion has two options she could consider.
Firstly, she could move all her mortgage to a portfolio lender. This means that she can secure the borrowing across the total value of the properties and have an agreed line of credit up to the maximum loan-to-value they would allow.
Any new property could be brought into the portfolio quickly as the finance is already agreed. There would be a reduced fee and the new property would not have to meet all the rental requirements.
This is only feasible if Marion does not have early repayment charges on the existing mortgages and if the rate offered on the portfolio lending is as competitive as the rate on the existing mortgages.
Secondly, she could remortgage some of the existing properties onto a flexible or offset deal whereby she agrees the maximum available to draw later or to use as an offset arrangement against the mortgage account until she needs to buy another property.
Again, she would need to be at the end of any early repayment charge period on the existing mortgages.
Katie Tucker is technical specialist at John Charcol
Marion really needs to see her property portfolio as one manageable asset or a few large groups at least. Ideally, she would remortgage her next houses that come to the end of any early repayment charges as a portfolio, with a lender who could lend against the total value and provide her with a pre-agreed facility of funds that she could draw on whenever needed.
Also, because rental income can be shared across the portfolio, the additional benefit of aggregate lending such as this is that properties with weaker rental yields can be subsidised with those of a better yield.
The Mortgage Works is popular for aggregate lending, although it is difficult to see the yields and payments for separate properties once they are linked.
Bank of Ireland can also aggregate rental incomes and Mortgage Express will look at a six-property portfolio for professional landlords; their flexibility of overpaying and underpaying may also suit Marion.
