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Can I get a 2nd mortgage if have deposit but in negative equity with first house.

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Our house at the moment is in negative equity. We have no problems paying mortgage and will have at least a 10% deposit savings for another house by next June.
We don't want to put that money into this house as we feel we have put enough into a house that we really aren't happy in. In fact we can't wait to get out of it! We would plan to rent this out.
If we have the depost and money for fees etc, would it be possible to get another mortgage for another house or site so we could build?
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Comments

  • Person_one
    Person_one Posts: 28,884 Forumite
    Tenth Anniversary 10,000 Posts Combo Breaker
    Would you be planning on renting out the house in NE?
  • rover25
    rover25 Posts: 387 Forumite
    If possible, I know we would have to get consent to let and if not then we may have to consider doing it anyway..
  • Person_one
    Person_one Posts: 28,884 Forumite
    Tenth Anniversary 10,000 Posts Combo Breaker
    Don't do it anyway. It wouldn't be fair to your potential tenants.

    I guess you'll just have to speak to your lender and see what they say, you'd also have to pass affordability tests for the new mortgage and demonstrate that you can afford to pay both sets of repayments should the NE property be empty for periods or you have non-paying problem tenants.

    I sympathise, but I think it might be a long shot. Would it not be better to throw your savings at overpaying your current mortgage to get the equity up, then move in a few years when it will be easier?
  • Annisele
    Annisele Posts: 4,835 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    I think you'll find it near-impossible to get consent to let on a property in negative equity (and actually impossible in the absence of exceptional circumstances).

    It's not really a case of "not wanting to put money into [your existing] house" - you already did that when you bought it. Your net position is the same regardless of whether you overpay your mortgage or keep your savings in a separate account.
  • rover25
    rover25 Posts: 387 Forumite
    Thanks for your reply. I totally understand what you're saying. It's just that our mortgage is about 165k and houses in this park are going for 95 - 105k. It'd be an awful long time to stay in the house to get it down to that level.
    We both dislike the house (soundproofing terrible), dislike area (all Housing executive) - we didn't know either of this before we bought (Our own fault I know)
    It really depresses me to think we've already been here for 3 yrs and to spend another 3 or 4 deeply unhappy is really worrying.
    We pay £775 per month at moment between the 2 of us. I take home £1700 total, my husband about £1200 -£1500 per month.
    We wouldn't do anything until we know what sort of fixed rate we will get from lender when our deal is up next June.
  • rover25
    rover25 Posts: 387 Forumite
    I know there are a number of issues especially regarding renting the property out. To be honest, I would leave it empty, if we had to. I would rather be able to relax in my home and be happy.
    Going back to if we could get a 2nd mortgage, does anyone know if this would be possible?
  • ManicMum
    ManicMum Posts: 845 Forumite
    Be aware too that your home insurance may be invalid if you rent a property without your lender's consent. But then you would need to take out BTL on first property as you can't hold two residential mortgages so guess they would know. I gues only thing you could do is to rent out your current property and then rent somewhere yourself? Hope you feel happy soon.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    What rate of interest are you earning on your savings and paying on your mortgage?
  • Bullfighter
    Bullfighter Posts: 414 Forumite
    Why don't you re-mortgage, max out your credit cards, borrow from family and buy 2 more properties...? I mean what could possibly go wrong??
  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    rover25 wrote: »
    Thanks for your reply. I totally understand what you're saying. It's just that our mortgage is about 165k and houses in this park are going for 95 - 105k.
    ...........
    We pay £775 per month at moment between the 2 of us. I take home £1700 total, my husband about £1200 -£1500 per month.

    What do they rent for?
    Then what can you net after costs?
    (renting out a house is not as cheap as it used to be)

    Thats the staring point anything is speculation without the facts.
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