Can i combine 2 properties on one mortgage?

mikeizz

Hi , I currently have a mortgage that i took out on my own i bought my flat for 130k back in 2007 and have 94k left on the mortgage.

My partner (who does not have a mortgage) and I are looking at buying our own place.

The question i want to know is would it be possible to get a new joint mortgage on a new place and to add the 94k that i owe on my flat to it and rent my flat out or would i have to sell my flat first before getting a second place with my partner?

Any advise would be great

Conrad

You need a new mortgage for the new place.

The existing mortgage remains in place on the flat and you try and get that lenders permission to let it (some people don';t bother getting permission in case they get a decline - but really you are supposed to let them know).

The new mortgage could be with a number of lenders that allow an existing mortgage to persist. Note some new lenders might want written proof your existing lender gave permision to let the flat.

Quite a simple case for a good broker.

kingstreet

Where's the deposit coming from for the new purchase?

mikeizz

Thank you very much for your reply Conrad that makes sense.

The next question i would like to ask if they remain seperate would it be possible to use the equity i have in current flat towards deposit on a new place?

Am i also right in thinking that because my partner has never had a mortgage we can get a new mortgage as first time buyers?

mikeizz

King street we almost have 10% deposit saved for the new place we want to buy but would be handy if could use some of my equity in current property to drive to LTV down.

kingstreet

You'd need to remortgage property one onto a formal BTL product if you wanted to raise an increased deposit for the new residence.

That would be limited to 75% of the property value and you'd need rental income to exceed the mortgage interest, assuming 6% interest, by 25% to justify it.

You may find a lender or two which will provide a 90% mortgage with a let property in the background, but you'll be restricted on lender options if you need them to ignore the let property mortgage. Many lenders will "tax" you the cost of the other mortgage, as it would a credit commitment, deducting the cost from your income.

Nationwide, for example, will only lend 85% for a second property and will require evidence of the rent payable on the first, or it will deduct the cost of the mortgage from affordability for the new one.

I have been told One Account allows two properties on the same account, so you could try remortgaging the current property to them, borrowing for the new house at the same time, otherwise there is no lender which will cross-charge property one to allow you a better loan to value product on property two.

mikeizz

Ok thanks for your advice , that clears up a few thoughts that have been in my head .

I think i would be able to get over the 25% the quote for rental income but would not be that much in it and looking for a new lender for second property sounds like it would make it harder keeping my current one on a BTL

Sounds like the easiest option would be to sell my current flat and use whatever money i make out of it on a new deposit for a new one, would you agree?

mikeizz

One other thing as my partner has no mortgage i am right in thinking we could get a joint mortgage for first time buyers even though i already have one??

kingstreet

Yes to sell and buy.

Yes, possibly to FTB status. Some lenders will allow a FTB product as long as one of the applicants is a FTB. Others won't.

TBH there's not a lot in it these days, rate-wise.

mikeizz

Thank you both for your advice, greatly appreciated