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Newbie mortgage help needed
Ovy
Posts: 4 Newbie
Hi all I am newbie with little financial knowledge so please be patient with me ok here goes....
I currently have a house purchased from my local council as a right to buy I am four years in so 1 year left on the councils 2nd charge. I do not wish to sell the house but change it to a buy to let due to a house we really like locally has just come on the market and we have great affordability and a tenant lined up just no deposit. We are a semi and the opposite home has just sold for £117000 (was put up at £119000) this gives me a very good indication as the the value of our house as It has a larger garden and a garage too. So I am using for now an assumption that a lender will value roughly £110000 based on this my outstanding on my current mortgage is £62223 if I deduct this from the 75% loan to borrowing (£82500). if I am right that leaves £20227 and I will need £18000 of this as deposit for the new house my question really is will the second charge from my original discount cause a problem freeing up the deposit? And also isn't there still the other 25% in the house if sold anyway? Any help or experience greatly appreciated Sy ps sorry if posted in the wrong place!!
I currently have a house purchased from my local council as a right to buy I am four years in so 1 year left on the councils 2nd charge. I do not wish to sell the house but change it to a buy to let due to a house we really like locally has just come on the market and we have great affordability and a tenant lined up just no deposit. We are a semi and the opposite home has just sold for £117000 (was put up at £119000) this gives me a very good indication as the the value of our house as It has a larger garden and a garage too. So I am using for now an assumption that a lender will value roughly £110000 based on this my outstanding on my current mortgage is £62223 if I deduct this from the 75% loan to borrowing (£82500). if I am right that leaves £20227 and I will need £18000 of this as deposit for the new house my question really is will the second charge from my original discount cause a problem freeing up the deposit? And also isn't there still the other 25% in the house if sold anyway? Any help or experience greatly appreciated Sy ps sorry if posted in the wrong place!!
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Comments
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Your chances of getting a deed of postponement from the council for this are very slim, I'm afraid. It's difficult to get them to budge to allow you to borrow for home improvements.
All you can do is ask, I'm afraid.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Thanks for the reply will I need a deed of postponement if I change lenders can it not be done as 1st charge so as no effect on 2nd charge??0
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Ok so can't get a deed of postponement as not for home improvements the question I'm asking is did I really need it.
I have been into few lenders and nobody seems to be able to give me a straight answer? If I remortgage plus additional amount as 1 charge under the 75%ltv without effect on the second charge ??? Also is the second charge against the 75%ltv or the overall value????0 -
Ok so can't get a deed of postponement as not for home improvements the question I'm asking is did I really need it.
I have been into few lenders and nobody seems to be able to give me a straight answer? If I remortgage plus additional amount as 1 charge under the 75%ltv without effect on the second charge ??? Also is the second charge against the 75%ltv or the overall value????
Anyone shed some light on this ??????0 -
When your current mortgage is repaid, the second charge is automatically promoted to a first. The deed of postponement stops this happening and leaves the second charge as a second charge.
Without it, the new lender will not have a first charge and will not accept that.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
I can't think of any BTL/LTB lender going for anything with a second charge unless it is being repaid by the advance.0
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