Remortgage or Secured loan?

Dr_Gonzo_2

I own a flat that I've just started renting out and I'm currently living with my parents until I find somewhere else to buy. The flat currently has a fairly small repayment mortage on it, with more than 50% equity in it.

For my next purchase I'm looking for around 40k for the deposit and any work that will need to be done on the property. I've been to see an IFA but most of the remortgaging options on the flat seem to have fairly high setup/legal costs plus a higher rate than my current mortgage. If I did remortgage I'd probably be looking at something that I could change again within a few years to a decent fixed-rate product, if and when rate stablise. So I'd probably be paying the setup fees again in 1, 2 or 3 years time.

Another option I thought of is to take out a secured loan instead of remortgaging the flat proper. Would I be able to use these funds for a deposit? (I've heard lenders aren't keen on people putting down 'borrowed' deposits).

Is the secured-loan option feasible? Or am I better of going down the remortgage route, bearing in mind I'll probably be remortgaging again in the future?

Thanks,

The Doctor

CLAPTON

secured loans tend to have fairly high set up fees and are usually variable rate from dodgy companies... think carefully before going down that path.

happybroker

Remortgaging has become quite a regular thing these days anyway.

The rates on secured loans tend to be higher so it depends very much on the rates your being offered for the full amount when compared to that of the existing mortgage and of the loan.

Are you looking to rent out the flat? if so then porting the existing mortgage to the new home and setting up a buy to let deal on the flat might work (limited info provided so might not!).

I think careful planning is the key to this and speaking to your ifa again would be a good idea with a view to him coming up with a more detailed recommendation for you.

Good luck