use existing home as collateral

karatoosh

Help please.... we have a house with a very small mortgate looking to buy another house. We live in Scotland. We are wondering if we could get another mortgage using the collateral from our present house. We might want to rent the current house out to pay for a new mortgage. Where do we stand? OUr mortgate is with Halifax. Thanks for any advice

Thrugelmir

To clarify. You wish to use the rent you pay the new mortgage?

GMS

You would need to get consent to let from current lender to rent the place out. Unlikely to be able to raise further funds on this basis.

You would need a deposit for the new purchase so if this is to come from the current house you would need to remortgage to a Buy to Let and take the deposit from the additional borrowing.

ScotlandM

The bank won't take collateral of your house, you would need to raise capital from increasing the mortgage.
Second up, you want to have 2 houses and rent one. It can't be anything but a BTL mortgage. And if you can buy one house outright live in the one with the mortgage

justjohn

unsure if rules have changed, however many banks used too let you rent out your own home without switching to BTL. RBS was one you just needed a notification form.

i would remortgage. (wait for a while)buy other property. then inform bank i would like to rent out first property.

if they force a btl mortgage tell them you will move too another provider.

if it all gets messy look at switching mortgage to the second house(new purchase)


DO ALL BANKS NOW FORCE BTL MORTGAGES ON PEOPLE IN THIS SITTUATION?

kingstreet

He wants to raise money on property one, to buy property two. He then wants to let property one.

As GMS has said, if he didn't need to raise money on property one it would be a simple consent to let from current lender. As capital is to be raised, he has to remortgage onto a BTL product.

justjohn

kingstreet wrote: »

As GMS has said, if he didn't need to raise money on property one it would be a simple consent to let from current lender. As capital is to be raised, he has to remortgage onto a BTL product.

OK i get it. Capital is being raised therfore there is an intent to rent lol

Banks they are such capatilists. lol

Conrad

Yes it is possible to arrange a top up mortgage in order to use that as a deposit on another place, people do it all the time to buy holiday homes and what not. If you then decided you wanted to reside in new place, at that point you would usually seek consent to let from existing lender and go from there.