2nd Mortgage on non Buy-To-Let property?

Swarm

Hello MoneySavingExperts!

My wife and me currently own a home and have a mortgage with a reasonable amount of equity. We both work and have jobs we love, but mine is a 160 mile round-trip away.

We have decided we would like to buy a flat where I work, where I would live mid week to save me the effort and expense of my commute.

We have enough equity in our existing home to raise a deposit for a modest flat, but would need an additional mortgage to fund the purchase. The total borrowing would easily fall within what banks would lend us in traditional circumstances against a single property, and our incomes/outgoings don't look like any reason for concern.

Since we don't intend to rent the flat out (I'll be living in it), and we can afford the loans - are there any rules/conventions that would prevent a lender considering this arrangement? All the advice I've come across seems to assume a rental is required to make the deal affordable (i.e. Buy To Let), but this isn't the case - or the intention - in our circumstances.

I understand that from an IR stand point, only one residence could be our primary residence, but from a lending point of view is there any reason we would not be able to get a second residential mortgage for a second residential property?

Thanks in advance.

borders

Similiar question to one I asked for my daughter who has been able to arrange a second mortgage. This was to let her buy and move to a new home while her flat was still for sale. The payments for the first mortgage was taken into consideration when working out how much she would be eligible for. Apart from that, it didnt seem to be a problem. She did have to speak to somebody (as opposed to doing it online) to discuss why she was wanting the mortgage.

It may be down to the lenders' own particular policy on the matter. Her original lender wouldnt give her a second mortgage and told her she would need to go elsewhere. She did and got another mortgage agreed without any problems. No extra rates or costs added for the second property.

I would say have a look for the mortgage that you would want and then contact the lender to see if they will agree to it. It will probably vary from one lender to another.

holly_hobby

This should not be a huge problem - your income will have to cover all commitments of course (inc your existing mortgage), check re SDLT for leasehold properties (which any flat purchased probably will be), which aren't always as straightforward as standard SDLT calcs http://www.hmrc.gov.uk/sdlt/calculate/leasehold.htm (don't worry too much about this, as your convenyencer will manage this for you - just to be aware of).

You will need to advise HMRC within 2 yrs of purchase which is you main residence (which is obv you current home) but is amendable if circs change, which means that the flat will be liable to a CGT calculation on disposal - which may result in a libility (after the deduction of all allowances/reliefs).

To save yourself the legwork, have a chat with a whole of market mge broker, whom will evaluate your requiremetns, the best lender for your circs, and support you throughout the whole application process.

Hope this helps

Holly

Swarm

Thanks - that all sounds pretty positive.

I had not considered Stamp Duty, though - it's great to ask questions on here