mortgage advice wanted please

abracadebra

We already own our home with no mortgage as it was paid off last year. if we wish to purchase a second home with a mortgage would that be allowed. i am confused as i have been told you can only own one home and if you have another you have to have a special mortgage eg a buy to let or a commercial mortgage. the second home will be for us to live in not to rent out or use for business so this seems wrong to me. We would like to buy a second home with a mortgage so that we can eventually sell our present house and then pay off the mortgage later with the proceeds. any advice would be appreciated

kingstreet

abracadebra wrote: »

We already own our home with no mortgage as it was paid off last year. if we wish to purchase a second home with a mortgage would that be allowed. i am confused as i have been told you can only own one home and if you have another you have to have a special mortgage eg a buy to let or a commercial mortgage. the second home will be for us to live in not to rent out or use for business so this seems wrong to me. We would like to buy a second home with a mortgage so that we can eventually sell our present house and then pay off the mortgage later with the proceeds. any advice would be appreciated

If you want to buy a second property, perhaps a holiday home, you shouldn't have to take out a buy to let product. You could remortgage your own home and buy the second property for cash and then who'd know what you're doing with it?

If you use the second property for the mortgage, you'll need a deposit of course. Either method will require the usual income and affordability checks and the term of the mortgage will have to fit with your ability to maintain the payments, for example, if you borrow into retirement.

abracadebra

thanks i hadnt thought of of a re- mortgage. thats a good idea actually. what are the rates like on remortgages as opposed to a "normal " mortgage, is there much if indeed any differences in price i wonder ?

kingstreet

abracadebra wrote: »

thanks i hadnt thought of of a re- mortgage. thats a good idea actually. what are the rates like on remortgages as opposed to a "normal " mortgage, is there much if indeed any differences in price i wonder ?

You're likely to get a better deal for the remortgage if you have plenty of equity as you'd need to put down a 40% deposit for the purchase to get the better offer that way.

ACG

The rate is dependant on the Loan to value.

If your existing property has a higher value than the new one, you would most likely be better getting mortgage on the first property. If they are valued at roughly the same amount, then the interest rates should be the same.