How to finance second house?

born_free_4

Hi all,

I would like a bit of advice or a few different opinions on how best to raise the money for a second house.

I have been offered an old house in a very "rentable" area (beside university and hospital.) for very little money
It needs lots of work to bring it up to standard, but that doesn't worry me at all. I have a 6-8 months to have it ready for the next academic year and I have tennants lined up already to move into it (they are starting a 4 year course and would stay for the full 4 years).

I have spoken to my bank and they only offer loan to purchase price rather than loan to value, so i need a 30% deposit for the purchase mortgage and a personal loan for the renovation.

I don't like this scenario, too messy.

I was thinking about additional borrowing on the mortgage on my main house to cover the full cost of buying and renovating.
I know I definatley have the equity to do it, and by combining the two loans/mortgages i have one monthly payment for both house and one incoming payment for the rent each month. i reckon by doing this I should be able to pay both houses early and my own children could benefit from the house near the university when the time comes.

is this possible? would the banks go for it? is there something that I haven't considered here?

all opinions welcome

thanks