Buying a Second Home with the Equity on the first house

coreen62

My parents live in a terraced house in London, the mortgage has been paid off. They now want to live somewhere quiet and would like to buy a second home away from London.

Is there a way of doing this without selling their home, could they use the equity on their first home?

Would be grateful for any advice.

Thanks
Coreen

spuds_2

They could do mortgage equity withdrawal or re-mortgage their current property - lots of people did this in the past to fund cars, holidays etc, or buy to lets. It is harder to do nowadays, plus lenders are probably only going to let you remortgage to say, 75% LTV.

How are they going to repay the mortgage each month? Do they still work? Lenders won't fund mortgages that go into retirement these days.

If they rent out their original property and use the rent to cover the new mortgage, then I guess that would be possible, but lenders are still pretty wary of such arrangements. There are also tax implications in renting it out and selling later. Someone with more knowledge will be along in a bit, I'm sure, but I hope this helps for now.