Can I...?

ATD_2

Hello All,

I will keep this brief.

I need to buy another house. Is it possible to get another mortgage and secure it on the equity on my first house?

Very Many Thanks

ATD.

MortgageMamma

Depens very much on your circumstances. can you give me a bit of background information?

ATD_2

Certainly.

I have a £67k mortgage on a house worth £104.

I want to buy another house for approx £135k and wondered if I could use the equity as security without doing a remortgage?

Many Thanks.

MortgageMamma

I dont think so - I was asked this about 18 months ago and couldnt' place it, spoke to a couple of other advisors who also thought a remortgage was necessary - if anyone else on here knows how to do it though I will be interested to find out.

ATD_2

So I will have to remortgage property 1 to release as much equity as possible to use a deposit on property 2?

That will work out expensive.

Keep you posted if I hear any different.

Thanks.

regularsaver1

how do you plan to raise the money otherwise?

ATD_2

I hadnt.

The question was, ''Is it possible to get another mortgage and secure it on the equity on my first house?''

regularsaver1

Would you rent your existing property out and move into the new one?

herbiesjp

ATD wrote:

So I will have to remortgage property 1 to release as much equity as possible to use a deposit on property 2?

That will work out expensive.

Keep you posted if I hear any different.

Thanks.

You say a re-mortgage will be expensive - not necessarily true.

Howver you want to fo for a second mortgage on the property - will work out far more expansive and have greater limitations in terms of extra finance available

HTH

MortgageMamma

The problem is, lenders don't like second charges and a mortgage is a first legal charge on a property - so the lender on the second property would have a second charge on your current property. your mortgage lender on your current property would not give up that first charge for anything, so the way I see it, the only way you can raise the money for the deposit for the new property would be to remortgage, take a further advance or get a secured loan - whichever works out cheapest and fits in your cirumstances.

However if you are buying the second property for someone else to live in, perhaps a child or partner you could explore to possiblity of guarantoring a mortgage for them, even a 100% one.

ATD_2

I intend to rent property 1 out, and move in to property 2.

The reason why I said a remortgage would be expensive is because of the early redempton charge that will be payable. I am however, aware that ERC's are unlawful and I could claim that back I suppose.

Going to see a mortgage advisor tomorrow, so I will let you all know what I intend to do.

Thanks for all your input.