A difficult one - (no advice thats not allowed but is this possible ?

roswell

Morning all,

Theres a long and short story to this but ill try get away with the short one, Situation as it stands currently, I almost own my house £15 000 mortgage left (mother lives in this house), Im looking to purchase another house (me and fiance) around £75 000, I have a deposit of around £14 000 for deposit and some improvements and about another £4000 for fees / moving.


Salary £17 000 + 27.5% shift allowance,

Looking at £63 000 mortgage 25 years @ 5.5 APR (Guesstimation at its best) £360 (ish)

Currently renting a flat rent is £220 a month and saving £250 a month (towards house deposit)

Is it likely that I could get a mortgage for the size im after with out any further borrowing on house number 1 ?

Now to chuck a spanner in the works, Current mortgage is offset (100% most of the time) recently the rate on thsi has jumped to 6.9% (I guess im not to profitable for them and they know it would be hard to get another mortgage for only £15000. If I do go ahead with the plan to get property number 2 I wouldnt need the offset and would look to reducing the rate (remortgage for slightly higher and make a large over payment once rate secured.

So the questions really are,
1) Could I arrange mortgage for property 2 in the current state of play.
2) Would I then be able to fix the offset problem after the purchase of property 2.

3) Is there a better way to do this ?

toonfish

there are several way sto o this, but your income would appear to be sufficient to ciover both loans anyway. You could certainly remortgage property 1 after the second purchase, or maybe even do both at the same time.

herbiesjp

Put simply - yes you can do waht you are looking to do.

It looks pretty straightforward, and maybe combining two amount on one property may leave one property mortgage free, but also allow you access to better deals on the mortgaged property (as you rightly say on £15k your options are not that great)

HTH

Mr_helpful

Why not rent house to mum put all the mortgage on that house as buy to let then all your mortgage interest can be offset against tax.

roswell

Thanks evenyone for your help I shall you know how i get on.

apk1

Mr Helpful, your idea of switching the mums house to btl and claiming tax relief sounds good but:

1/ Most lenders do not permit family as tenants (so care there)

2/ Tax man will normally only allow tax relief on interest if funds were used to purchase the property, not to purchase another property, although many people do claim I know incorrectly.

Mr_helpful

take it you have not seen a property self assessment form. I just filled mine in a couple of months ago. It doesnt ask the question about what the mortgage was for it purely asks what the income was and finance expenses etc. Its not my fault or the OP's if good old IR doesnt ask the correct questions.
As for the lenders well most may not like it but that isnt all is it?

apk1

Fair points mr helpful.

roswell

Well some news, Been to view property, Have found out the owner who has only been there 8 months (Thanks to nethouseprices.com and seeing the property on the market around that time)

Estate agent informed us due to family reasons they need to move quickly to scotland, and seemed very excited that we are currently renting .

Im considering putting in offer based around previouse sale price (below the average recent sales) due to no working being done since they purchased and its a bit out dated compaired to other properties.

Slight hicup is the estate agent wants us to meet there mortgage adviser and arange a AIP before they will accept and offer (no offer amde yet), I have a feeling they think we are a little green behind the ears, So question, Is it easy to get a AIP with out a credit search ?? I dont have anything against a credit search as it wont show anything exciting but I dont want to waste a search just for a piece of A4 to satisfy putting and offer in that may not even be accepted.

Mr_helpful

Estate Agent is acting on the verge of illegality here. You have to give your permission for the credit check and you can use any broker you like you cannot be conditionaly forced to see their broker. Get yours to do an AIP with BM solutions as it doesnt leave a footprint and only takes a few minutes, then go with whatever lender is best.

roswell

Thanks again to everyone, A progress report as such, had second viewing of the property and put in an offer of 72000, property is on the market asking price £74950, I was sure this property was sold recently as i wanted to view it but it was already sale agreed. Turns out property last sold for £68 000 8 months ago.

Due to elderly parents failing health they need to move back to scotland and one of the occupants needs to start new job on 1st April the other will wait till the house is sold, during thsi time they will be paying rent on a property in Scotland and commuting each weekend to and from scotland,

How did our offer go down ? it wasnt accepted, they "Need" a minimum of £74000 i think thsi is just the estate agent being pushy so have advised that I am not willing to increase my offer so im holding out for now its been 2 days since the offer was made.

Since moving in they have removed the coal fire in the lounge and boarded up the chimmney with plaster board (doesnt look like its been capped though so this will need fixing) and put a lick of pink paint on one bedroom wall and a lick of paint in the lounge, There has been no upgrade of windows / decor / wood work / kitchen / Flooring since the last sale. Hence why I feel my offer is fair it should cover there costs and as we are chain free should make a easy and quick sale for them.