Second mortgage when first in negative equity

Steste_2

Hi,

In the sad position of having bought early 2007. Now in a lot of negative equity but need to move.

We have permission to let from provider and are looking to rent other properties. However we have a fair bit saved up, enough for a deposit on another property.

Do we stand any chance of getting a second mortgage?

Thrugelmir

Why not use your savings to clear the negative equity and sell the house?

Buying another property and renting the existing may do little more than increase your financial woes.

Would you walk into a casino and put your savings on either black or red on the roulette table. As that's in effect what you are proposing.

Steste_2

The savings are not enough to clear the negative equity.

We have the finances worked out. In theory we could leave our existing house empty and still be able to afford another monthly mortgage payment.

Thrugelmir

What rate of interest are you paying on your current mortgage?

Steste_2

Currently on santander svr at 4.7%

Mortgage is 590 a month. Income is 3500 a month after tax.

Thrugelmir

Would appear that your best option is to overpay your mortgage. Rather than save the money elsewhere.

Steste_2

Ok but we have to move. We are planning on renting elsewhere but were considering buying somewhere else. Is it possible to get a second mortgage when the first is on negative equity?

Thrugelmir

Steste wrote: »

Ok but we have to move. We are planning on renting elsewhere but were considering buying somewhere else. Is it possible to get a second mortgage when the first is on negative equity?

Totally at the discretion of the lender with regards to a second mortgage.

If you do obtain Consent to Let then remember that the period of same is often limited i.e. 3 years. So that may not sufficient time to resolve the negative equity issue.

Conrad

Steste wrote: »

Is it possible to get a second mortgage when the first is on negative equity?

Halifax can do this sort of thing as long as you apply correctly. Failing that some other lenders could consider if the rent is sufficiently higher than the mortgage. Maybe try your local brokers - the experienced ones, not the salesy types.