Can we mortgage a house owned outright for money to bring down another mortgage?

jvint1

Hi All,

First post but looking for some advice- this is a slightly tricky one. The house we live in now we have just remortgaged to a better rate offset mortgage with 1st direct and everything and im happy we made the right decision with that one. Our second house that we ended up having to keep when we moved into our new property just over 2yrs ago because we were in negative equity so could not sell and so have to rent out at the minute -we had an alliance & leic mortgage now santander and we are now on their svr of 4.99%- now this mortgage is ridiculous we took it out over 40 yrs back in 2007 when everything was rosey- the house is now worth around 130k but we still owe 128 ish on the mortgage- we have consent to let through santander at the moment. The third part of this equation is my parents have moved and have given me their old property which is fully owned with no mortgage- we also currently have tenants in their at the minute. So here is my ultimate question- can I mortage my parents old house to free up maybe 20 or 30k to pay off a chunk on house number 2 mortgage so I can then remortgage that property down to 25 yrs max and also alot better rate because i can get a significantly better ltv- obviously added to the complexity is the 2 sets of tenants and if remortgaging they will give me consents to let.

Sorry for the really long question but could do with anyones help or advise possible. Many thanks in advance.

Thrugelmir

You'll need to obtain BTL mortgages. You won't be granted CTL on remortgaging. As the neither of the properties is your residence.

jvint1

Had a feeling that is what people were going to say- now btl on the owned outright should be easy as could get half decent rate because of ltv but as for the 2nd house does this mean id probably have to take alot more than 20- 30 k out of my parents house to also get that down to better ltv because of having to take btl ?

amnblog

You can re-mortgage the newly inherited property.

If you have owned the property less than 6 months many lenders wont do it. Otherwise you should have a number of options.

jvint1

ok thank you for letting me know that- that will be an issue as we have not actually transferred over the property into my name yet- we wanted to work out what to do before we did it- are there any other options

amnblog

There are lenders that are less fussy about the 6 month rule on BTL properties (assuming you will be letting it out?)

Consult a competent broker.

jvint1

beginning to sound all in all like I may be best to stick with the pretty terrible santander mortgage on our second house after all as by freeing up the money to bring mortgage down I would have to take out 2 buy to let mortgages where as today santander are giving me the consent to let- having to take out 2 buy to let mortgages completely rules out any gain from bringing the 4.99% long years mortgage down- If any has any other suggestions id be very grateful