How much deposit required on second mortgage?

mrsraggle

We're currently on the market trying to sell our house when today I found out the house down the road that sold for 100k has been de-valued by the surveyor to 90k. Our remaining mortgage is £92k and we were hoping to achieve 100k in order to move (we bought in 2007 for 106k ). Our chances are looking slim right now.

So Halifax have given us consent to lease but what I really need to know, is can I let my house out and buy another?

What sort of % deposit do you need on a second mortgage? Can you even get another mortgage under these circumstances?

My father in law is getting us an appointment with an IFA but in the meantime I thought I'd get some thoughts from here. Thank you!

Thrugelmir

Could you afford to service both mortgages and maintain both properties?

Letting property is not merely a question of collecting rent cheques.

HappyMJ

mrsraggle wrote: »

We're currently on the market trying to sell our house when today I found out the house down the road that sold for 100k has been de-valued by the surveyor to 90k. Our remaining mortgage is £92k and we were hoping to achieve 100k in order to move (we bought in 2007 for 106k ). Our chances are looking slim right now.

So Halifax have given us consent to lease but what I really need to know, is can I let my house out and buy another?

What sort of % deposit do you need on a second mortgage? Can you even get another mortgage under these circumstances?

My father in law is getting us an appointment with an IFA but in the meantime I thought I'd get some thoughts from here. Thank you!

It would be a first mortgage on the property you buy so you should have at least 10%.

If you have an existing BTL mortgage you could have as many as you want. They would all be first mortgages on the properties they cover.

A second mortgage is when you get another mortgage when you already have a mortgage on the same property. In that case you don't need a deposit at all. You just need to afford it.

mrsraggle

Thrugelmir wrote: »

Could you afford to service both mortgages and maintain both properties?

Letting property is not merely a question of collecting rent cheques.

Yes I've started collecting the figures and the income would cover the mortgage, insurances, management fees and we would have extra provision for maintenance.

mrsraggle

HappyMJ wrote: »

It would be a first mortgage on the property you buy so you should have at least 10%.

If you have an existing BTL mortgage you could have as many as you want. They would all be first mortgages on the properties they cover.

A second mortgage is when you get another mortgage when you already have a mortgage on the same property. In that case you don't need a deposit at all. You just need to afford it.

Oh right, so I can have another mortgage with a 10% deposit. That's what I was hoping to hear!

The mortgage we have currently is just a normal SVR with consent to lease. We'd be looking for a new mortgage with 10% deposit to purchase a second house for us to live in.

Thrugelmir

mrsraggle wrote: »

The mortgage we have currently is just a normal SVR with consent to lease.

Consent to let is at the discretion of the lender, and on the terms the lender sets. CTL is only deemed to be a temporary measure normally for 3 years. So you need to consider the longer term in your plans. As at a point in time your mortgage will be interest loaded or you will be required to switch to a BTL mortgage.

mrsraggle

Thrugelmir wrote: »

Consent to let is at the discretion of the lender, and on the terms the lender sets. CTL is only deemed to be a temporary measure normally for 3 years. So you need to consider the longer term in your plans. As at a point in time your mortgage will be interest loaded or you will be required to switch to a BTL mortgage.

What does interest loaded mean? Can you only apply once for CTL then?

dimbo61

You really need to do your research on this.
CTL can be for one or two years and then the lender may decide to withdraw it. Some owners have been renting out there properties for years with CTL and other lenders have refused all requests.
In seven years of owning the property you have only paid off £14,000.
Being a Landlord can be difficult and expensive at times.
Can you make any money from renting.
You are on a repayment mortgage YES ? and how much can you get in rent each month ?

grogdog

You will find 90% mortgage on the new residential will not be easy.

A lot of lenders will limit you to 85% due to other property not yet being let.

Also because it isn't let some companies will take full mortgage payment as a commitment which may affect affordability of new purchase.

Best go to a more a mortgage advisor who will help

Thrugelmir

mrsraggle wrote: »

What does interest loaded mean? Can you only apply once for CTL then?

Some lenders will add increase your standard interest rate to reflect the increased risk. Here's the NW's terms as an example.

For new letting requests an additional letting interest rate of 1.5% (variable) will be charged on all accounts (exclusions apply) when you have been letting your property for more than 6 months with Nationwide’s permission. Notification of your new monthly payment will be sent approximately 2 weeks before it is due.