Trying to obtain a 2nd mortgage

mikeparr78

Hi, i am desperate to move houese, i currently have an interest only mortgage at 1% above base rate.
The mortgage is for £113'995. Unfortunately due to the rapid decline in house prices my current house is only valued at the price of my mortgage therefore after fees etc i will be in negative equity. I dont fancy selling my current house and having to pay more than i get for it.

I have savings of £30'000 and want to use that towards a deposit on a new house and was obviously planning on putting any profit from my new house down as a deposit aswell. However dut to the negative equity that wont be happening and this is a major blow to my moving plans.

Would i be able to rent my current house out and put my £30'000 down on a second property leaving a second mortgage of £170'000.

The first mortgage is in my own name the second one would be joint between me and my partner.
We have a joint income of £61'000, with no depts or other finacial commitments

many thanks

kingstreet

You firstly need to ask your current lender for consent to let your current property and then spend some time studying the responsibilities of a landlord if you can't/won't sell the first property.

A lender may look at the current mortgage like a credit commitment, assuming you have no tenant and are having to pay two mortgages at the same time with no rent coming in. This will reduce your borrowing power but may still leave you enough to justify the new mortgage on the new property.

In principle you can do what you're asking, but you'll need to put some work into fine-tuning the figures to see if they stand up.

mikeparr78

many thanks for the reply. I havent yet spoke to my current lenders, asuming that they agree. Who would be the best people to discuss what i have in mind regarding the extra lending etc? Because if i cant raise the lending amounts then it would be a none starter from the off!
Would i be better speaking with an independant advisor or the high street banks.

Thanks

kingstreet

Perhaps a combination?

HSBC, Yorkshire BS, Britannnia etc only deal direct, so a chat with them might be helpful. A good whole market broker can cover the other part of the market for you so you should get all the options covered.