Remortgage to buy another house?

Craig_Donny

Hi there,

Just wondering if someone could clear this up. Currently have a house (which i renovated) with a mortgage of 66k, house valued at 130k. Mortgage is with Halifax at moment, but i want to leave as soon as i can, which is November within my fixed term.

So when i contacted to ask about lending more, they said it is classed as a different mortgage. If that is the case would i be able to get another mortgage, with a different lender on the equity in the property i want to get out?

Thanks

marathonic

Craig_Donny wrote: »

Hi there,

Just wondering if someone could clear this up. Currently have a house (which i renovated) with a mortgage of 66k, house valued at 130k. Mortgage is with Halifax at moment, but i want to leave as soon as i can, which is November within my fixed term.

So when i contacted to ask about lending more, they said it is classed as a different mortgage. If that is the case would i be able to get another mortgage, with a different lender on the equity in the property i want to get out?

Thanks

You're situation is pretty much a mirror image of mine except that my mortgage is with Ulster Bank and the fixed term ends in December.

I'm also interested in responses to this. Ulster Bank will lend a top-up up to 80% of the value of my LTV where the additional funds are for a foreign property (which is what I'm looking for). However, they don't offer the best rates so I'm interested in what the likes of HSBC would offer.

kingstreet

If you want to remortgage property one, that's a new mortgage with a new lender on this property, you'll need to explain what you intend to do with the property.

If you intend to let it, you'll remortgage to a let to buy product, borrowing upto the maximum of 75% of the value. You'll see most of the money used to repay the current mortgage, with any residue available to you to use for the deposit on your new residence.

The rent will need to be 125% of the monthly mortgage interest, assuming perhaps 6% per annum, otherwise you'll be able to borrow less than the 75% maximum.

Then, you need a new mortgage for your new home. As this will be a "second property" you'll need a lender willing to ignore property one in the background as it will (hopefully)be self-financing and you'll see your maximum loan to value limited by many lenders as it is a second property. Some lenders will deduct the cost of the mortgage on property one, so be careful as this could scupper the amount you want to borrow for your new home.

This would best be explored with a whole market broker.

Craig_Donny

kingstreet wrote: »

If you want to remortgage property one, that's a new mortgage with a new lender on this property, you'll need to explain what you intend to do with the property.

If you intend to let it, you'll remortgage to a let to buy product, borrowing upto the maximum of 75% of the value. You'll see most of the money used to repay the current mortgage, with any residue available to you to use for the deposit on your new residence.

The rent will need to be 125% of the monthly mortgage interest, assuming perhaps 6% per annum, otherwise you'll be able to borrow less than the 75% maximum.

Then, you need a new mortgage for your new home. As this will be a "second property" you'll need a lender willing to ignore property one in the background as it will (hopefully)be self-financing and you'll see your maximum loan to value limited by many lenders as it is a second property. Some lenders will deduct the cost of the mortgage on property one, so be careful as this could scupper the amount you want to borrow for your new home.

This would best be explored with a whole market broker.

Property one will be lived in by myself, which it is now. Its only the second that will be rented.

kingstreet

In which case, you need to take additional borrowing from your current lender, or remortgage to a new lender to repay the current mortgage and to raise the deposit, then you need a buy to let mortgage for the property you intend to let.

Again, best approached with a whole market broker as such products are still broker-centred.