Buying a second home/mortgage

polly30

I bought a flat last year for 125,000 and currently owe 118,000 on the mortgage. I have now moved in with my partner and im renting the flat but at the moment not veering my mortgage due to being on a high fixed rate. My partner and I now want to sell his property but keep mine as an investment and also because given the drop in house prices I may be in negative equity. I am due to remortgage in February and expect at this stage the rental will cover the cost of my monthly mortgage payment.

We want to apply for a second mortgage to buy a house for 200,000 but only have a 10% deposit, how hard will this be? Our current provider Nationwide have advised we qualify to borrow the money but will need a 15% deposit if we can’t to keep two properties is this consistent with other mortgage providers.

Any advice would be appreciated.

alexlyne

I have done something similar - I have a house with 72k of an 80K mortgage paid off. I am now buying a house with my fiancee, and we looked into keeping my house as an investment. They said in order to be able to keep both, they would need 15% deposit on new house (not 10% as we wanted), and would also need to have paid off at least 15% of my house's current value - this 'current value' was what their computer said and was non-negotiable - this was 78K. They would then consent-to-let us the old property.

So the extra money to pay off some of the old mortgage, plus the extra deposit on a new property made this option a definite no for us.
To be fair, if I let out my property, I really wouldn't get enough of an income from it to offset risk of any repairs or tenantless periods.

If you are being lent 180K on two incomes, will you be OK if something happens to one of the incomes (unemployment/illness/babies)? Will you be OK if the house remains unlet for a period of time? Me n the future missus could have borrowed 220K if we wanted... but went for 140K to ensure a quality of life away from paying mortgages.

polly30

thanks for the post. Its looking more and more likely that we would need to sell both properties to be able to afford a deposit for a new home. We can afford the mortgage for a 200k house but i guess there is a lot to consider in terms of letting, pregnancy etc.

I think we may consider renting both flats until the property market picks up or alternatively you have got me thinking that maybe we should buy a smaller property with a more affordable mortgage and look to buy bigger in 5 years time when hopefully we will have made a bit of profit on my flat!

Something to think about! Thanks