2nd Mortgage

rizwany84

I have a residential mortgage with Barclays in my name jointly with my father (76yrs old). My fathers name is in the mortgage solely for the fact that he gave the deposit. My parents live in this house. The mortgage is an offset lifetime tracker at BoE+0.48%. My father has £25k in his account offset against the mortgage. Outstanding balance is about £70k and the house is worth between £110k-£120k.

I now wish to get a home for me and my wife. This would be my second residential mortgage. My income is £27,500 and my wife’s income is around £25k.

As the first mortgage has a “Mortgage Current Account Reserve’ I could get £20k from the offset mortgage to borrow as a deposit for the second home.

Do you foresee and potential problems? Any advice appreciated.

getmore4less

How is the current mortgage funded.
do your parents have reasonable income
What is the full term.

Check your Barclays mortgage details carefully, I know ours has checkpoints on certain ages so there is a chance that they will review at some point.

What are you planning to borrow for this new house.

rizwany84

getmore4less wrote: »

How is the current mortgage funded.
do your parents have reasonable income
What is the full term.

Check your Barclays mortgage details carefully, I know ours has checkpoints on certain ages so there is a chance that they will review at some point.

What are you planning to borrow for this new house.

Current mortgage is funded by me, but my father can afford it on his own with his pensions. But I think I will still need to keep my name on this mortgage as he is 76 yrs old.

I am planning to borrow about £120k for my second mortgage with £20k deposit from the first mortgage.

I am seeing a mortgage advisor tomorrow in the bank to advise further.

getmore4less

If you pull out the reserve £20k that takes total borrowing over £200k which might be stretching the numbers. ( with 25k offset)

Another angle might be to use the reserve and the £25k(if dad can spare it) to reduce the borrowing that will be at a higher rate.

rizwany84

Thanks for the replies.

Spoke to a mortgage advisor at Barclays this morning. She added my wifes and I monthly income together and took away the mortgage payments for the first mortgage. Then whatever was left, thats what we can afford to pay back.

As to the amount we can borrow, she did our joint salary * 3 + mine as a maximum we could borrow. (27,500 + 25,000 * 3 + 27500)

All good news. Just have to save 15% for a deposit now.