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2nd property, what are our options?
wilsons
Posts: 87 Forumite
Folks,
We currently have a house with a remaining mortgage of around £50k outstanding. We’re looking at a second house costing £187k and now need to sort getting the money organised. I think we have a few options but was hoping your guys could give me a few pros and cons on these ideas?
1. Our current house is worth approximately £200k so what sort of equity (is this the right phrase?) could we release, and would it be enough to cover getting the new house? Is this called re-mortgaging our existing property??
2. Get a second mortgage from our existing lender. We both earn about £50k total and would have about £10k to put down as a deposit. What sort of repayments are we talking about? Would probably go for a fixed rate to start or is this a bad idea?
3. Get a 2nd mortgage from a different bank? (Is this allowed?) Can we tell them we are first time buyers as our 1st mortgage is relative low?
4. Ultimately, we would like to let out our current house if we move to this second one. Do we need to let the bank know this and how does it affect our mortgage?
5. Last one! We’ve got quotes from a few solicitors, cheapest so far being £3050 (includes stamp duty and is 0.5% for legal fees). How does that sound?
If you can think of any other ways, I'd be happy to lend an ear!
Thanks for any help!
We currently have a house with a remaining mortgage of around £50k outstanding. We’re looking at a second house costing £187k and now need to sort getting the money organised. I think we have a few options but was hoping your guys could give me a few pros and cons on these ideas?
1. Our current house is worth approximately £200k so what sort of equity (is this the right phrase?) could we release, and would it be enough to cover getting the new house? Is this called re-mortgaging our existing property??
2. Get a second mortgage from our existing lender. We both earn about £50k total and would have about £10k to put down as a deposit. What sort of repayments are we talking about? Would probably go for a fixed rate to start or is this a bad idea?
3. Get a 2nd mortgage from a different bank? (Is this allowed?) Can we tell them we are first time buyers as our 1st mortgage is relative low?
4. Ultimately, we would like to let out our current house if we move to this second one. Do we need to let the bank know this and how does it affect our mortgage?
5. Last one! We’ve got quotes from a few solicitors, cheapest so far being £3050 (includes stamp duty and is 0.5% for legal fees). How does that sound?
If you can think of any other ways, I'd be happy to lend an ear!
Thanks for any help!
0
Comments
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Remortgage your house to a Buy to let mortgage raising as much as possible because interest on a BTL is tax deductable against the rental and then top up any mortgage requirement on the new house with a residential mortgage. what you are doing is called a Let To buy, dead easy.
Consult fee free independent broker like me there are plenty on this site.I like to give people as many choices as possible to do what I want them to. (Milton H Erickson I think)0 -
Thanks for the help. Spoke with our bank and they won't allow us to remortgage as we don't have enough equity
Have to go for a second mortgage, 5yr fixed is the best offer they provide. Should we put the deeds in both names as its our second house so we will have twice the allowance when we sell on (to reduce/avoid CGT) or does it matter? 0
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