100% Second mortgage, can anyone point me in the right direction please?

mrsmoneybee

Do 100% second mortgages still exist? We'd like to buy a second property and rent this one out as it's now too small for us, however I'm loathe to remortgage this one when our interest rate is less than 1%. We would have no deposit for the second property but could easily cover the mortgage on this one with rent (with about £250 left over). Please could anyone point me in the right direction?

marathonic

It's likely that any new mortgage would be based on proving that you have consent to let on the current property. Most lenders will provide this but increase the rate significantly.

If the mortgage on your current property is £250 less than market rent in the area, I'd question why you think you could afford a larger property when you don't have any deposit saved whilst living in a property with such a low mortgage.

marathonic

Actually, I just read your signature about paying off debt. If it's up-to-date, I don't see you getting a mortgage with that debt - even if you have significant equity in your current property.

How is your current house "now too small"? Is it children on the way or just a desire to "move up the ladder"?

If at all possible, I'd suggest staying in the current property and continue paying down debt.

mrsmoneybee

The signature is not too far off although hasn't been updated in the last few weeks. Equity in the house is £50k. There's no need to question why we think we can afford a larger property, I know we can and the finances will show this (income is app. 10x the mortgage payment), we just couldn't a few years ago when I was on Mat leave and hubby's wage was lower. Despite these figures the credit score is good as it is paid as it is all up to date. Properties of this type in this area are a rarity to rent so the income potential is good. Can anyone please advise if second mortgages are still available with a low LTV as releasing equity in this will cause the mortgage rate to increase.

Simon_gloster

100% mortgages dont exist. Although you say you have no deposit, but have £50k available.


Try raising a deposit on your current home, turn it nto a consent to let.

Everyones a winner. You get your new home, lender hikes your rates.

Dave_Ham

Unfortunately, you want it all your way and the banks are not going to accept this.

You have an incredible rate and I understand why you would not want to lose this, but either do not move or accept that you will.

To let your property out you will require consent to let and therefore they are likely to increase your rates (not always - but likely) at which point you will require a new mortgage and the first question will be affordabilty.

You will have to include the mortgage (unless consent to let achieved) and the unsecured payments (whatever they are)

Unless you have some good fortune, or additional information we cannot see pulling this together is unlikely and without 10% deposit impossible.

shortchanged_2

No you will not get a 100% mortgage.

Conrad

Do some people live underground? We are in the midst of the greatest economic crisis of all time, where whole nations Banking systems are exposed to trillions in unrecoverable debt, where the UK has nationalised some of it's Banks, and here we have someone asking if 100% second mortgages exist!

Ignorance is bliss I guess.

Brock_and_Roll

As the other posters have said, there is not a chance in hell of getting a 100% mortgage on a second home, and even 90% I would have throught improbable for someone with perfect status and no debts.

Even if this were possible, are you sure this is wise? Mortages are very long-term committments - 20 years+. At some point, maybe not next year or the year after, interest rates will revert back to, or even rise above their long term averages. Could you aford two mortgages if the interest rate was 5% or even 10%? What would happen if one of you was ill or hubby redundant etc?

The current mortgage you have is the best rate you will EVER get. As such your potential to save money is at its maximum. Having read the rest of your posts, it is clear you should carry on attacking the most expensive debts first and when they are gone, start overpaying the mortgage until you are in a position that after costs, you will have a 25%+ deposit for your new home.

There are no short cuts and you are unlikely to have as much disposable income as you have now. If you still have Sky at £100+ pm and your wine club, fine but hubby and yourselves need to remind yourselves that if having a bigger house is your dream, these items are delaying that dream becomming a reality.

It sounds like you are doing a good job with your debts - you need to keep up the good work!

lippy1923

I have to agree with previous posters on here. 99% chance you will NOT get a 100% mortgage.
Pay your debt and reduce some of your existing mortgage first.
Think very carefully and responsibly.

somethingcorporate

lippy1923 wrote: »

I have to agree with previous posters on here. 99% chance you will NOT get a 100% mortgage.
Pay your debt and reduce some of your existing mortgage first.
Think very carefully and responsibly.

You're being very generous. There is 100% chance of them not getting a 100% mortgage, they have not existed in quite some time!