Can I get another mortgage ?

Peter_L

Hi All

I am lucky enough to be left my parent's family home as my mum is going to live with other relatives and the house is worth approx. £170k I would like to move into this property but would like to make approx. £70k worth of improvements first.

I currently have a £100k mortgage which is fixed at 1% above base for the remaining 17 years of the mortgage with Intelligent Finance (who have now stopped doing mortgages for new business) on my own property. I aim to live here (and continue the mortgage) until the other house is completed and I will then sell this for approx. £130k

Will I be able to get a another mortgage to cover the £70k improvements on the house I now own outright ?

Conrad

It can probaly be done but it needs to be positioned correctly. Lenders will want the property occupied from day one as will the insurer for that matter.
Possibly consider buy to let, although thats probably not the best way to go.

Halifax allow a second mortgage. Beware some lenders m,ay request proof the existing home will be let out now.

Peter_L

Occupying it from day one isn't an issue as it is literally in the next street. Buy to let isn't an option as I want to renovate the house and move in and then put my exisiting house on the market. I have been told that I can have as many mortgages as I want so long as I can afford to keep up with the payments. My existing mortgage is at 1% above base (i.e. 1.5% for the term) so can easily afford another £70k mortgage on top and I will reduce this to only £40k mortgage once I sell my own house and pay off my exisiting mortgage and have £30k to spare (the house was valued at £150k a year ago but I'm realistic and will sell for £130k)

Do I need to tell my exisiting mortgage company that I will be getting another mortgage and vice versa ?

getmore4less

Will IF still port mortgages?

If they will then porting it and getting the new mortgage(which will be much more expensive) on the property you plan to sell may be an option. that way you keep the good rate long term.


If not then another option may be to phase the work and take the hit on losing the good rate now you will lose it when you sell anyway.

Get a larger mortgage(maybe an offset) on the new house paying off the old one and fund enough work to move in, sell the old place and finish off the work.

To get lending at a level of around £170k you will need income around £50k

Will IF offer a reduced redemption to get you to leave?

Peter_L

Thanks but IF have stopped Porting now as they have pulled the plug on lending money. Cannot get the £170k (have thought about it) as only earn £43.5k any other suggestions ? Can I not keep my current £100k mortgage @1.5% and just get another £70k mortgage at a higher fixed rate taking it against the equity against the house I now own outright ?

getmore4less

Income level is probably a bit low allthough on affordability you may find a lender willing to streach perhaps approach your bank.

Is the lower lending target with phased build approach not a possibility.

What about selling and renting while the work is going on if no plan to keep the other place.

new_home_owner_3

getmore4less wrote: »

What about selling and renting while the work is going on if no plan to keep the other place.

I think that sounds like a good idea, you sell for 130,000 , then you have 30,000 for improvements straight away, then just remorgtage when you are renting using the equity from the other house to raise the 40,000 pound to complete the improvements.

LilacPixie

Will the reonvations planned make living in the house impossible??

Peter_L

Thanks for the suggestions - moving out and renting not an option - have two very young kids and do not want to go through the hassle of moving out, renting etc. Just want to stay here, get the other place done, move out and then put my house on the market. Given the market at the moment I don't even know how long it may take to sell, at least when I've moved I can wait ...

P.S. Property will require extensive remodeling and extending so cannot live in it whilst work going on.