can i have 2 mortgages?

snoopcat

I am looking to invest in a second property purely to renovate and sell on. I currently have a mortgage on my own home and do not want to put that at risk. I don't know the best way to finance this property venture. Could I have a second mortgage running alongside my existing one or is there a better way around it? Pleeeease help!!

herbiesjp

Simple answer is - yes in theory you can have two mortgages running.

However what type of mortgage you will have available for the second property will depend entirely on your circumstances.

Do you have a deposit to put down for the second property without raising any capital from your first property?

What is the purchase price?

snoopcat

I don't have a purchase price as yet because i need to work out how much we can comfortably afford to pay each month. My husband and I are both in full time employment but am not sure how many times joint salary is normally considered on a mortgage offer now. (Its a while since we took out our mortgage!)

We don't have a great amount of savings to put down for a deposit on a second property so would I be right in thinking we would need a 100% mortgage? And would this have a much higher interest rate? And do all mortgages have an early redemption fee?

Could the other option be to re mortgage? I am still weary of putting our house at risk for a second property.

Soooo confused!! Can You help???

A_Nice_Englishman

I expect someone with more experience in this than me will be along soon but as long as the business plan for your property development business stacks up I wouldn't have thought there would be a problem.

When writing your plan, I would suggest you take make allowance for possible (likely?) rises in interest rates, possible falls in property values and time and cost overruns during the renovation.

Don't forget about the tax implications either. I think you would be liable for income tax at your highest rate on any profits.

herbiesjp

It would probably be best for you to raise enough deposit from your first property to put down as a deposit for the second property. That is assuming you have this possibility based on your property value and current outstanding mortgage.

You would then go about putting the deposit down on the second property and buying in the normal way.

There are few options of how this could actually be done, but it will depend on your exact circumstances as to whihch would be best for you.

Have you had a word with a fee free whole of market adviser?