Can I have 2 residential mortgages?

bouncerdrum

Hi, new to the forum - hope someone can help

I live in the north-east of england, and work mon-fri in Derbyshire.

I commute home every weekend - permanent re-location is not an option as i have children back in the north-east that i only get to see at weekends (separated from childrens mother)

I have one buy to let mortgage in place for a property that I rent out in the north east.

I'm in the process of buying (via mortgage) my main residential property back in the north east.

Currently - I rent a flat in Derbyshire - but i do see this as dead money - as my job is a long term prospect - and can't see myself going back to the north east anytime soon to work - so i would really like to buy a flat in derbyshire as a 'second residence'

I have no credit card debt, and one personal loan with a monthly comittment of £450 that has four years to run.

My needs aren't extravagant - the properties i'm looking at are both around the £60k mark

I don't have a huge amount to put down as a deposit however, and would be looking at 95% LTV if possible.

So, can anyone tell me what the potential probelms, costs, pitfalls are of doing / trying to do this ?

Thanks for any help in advance

kingstreet

You can have as many residential mortgages as you can afford.

However, 95% for a second property is very unlikely. I expect 90% will be the maximum, less with some lenders.

ACG

Theoretically yes it is possible, but I cant see you getting at 95% ltv.

Probably more like 85%.

Also with 95% mortgages the majority are using the govt help to buy scheme which specifically states you can not have a second property.

Ozzuk

As mentioned, its totally possibly (but I agree on the LTV), I currently have two residential mortgages.

However, as well as the LTV, they will really go over your affordability, i.e, looking at your total debt. I had to get rid of virtually any debt before they'd lend on my second residential mortgage, was a complete nightmare and I didn't get a very good rate.

I'm not affiliated in any but you'll almost certainly have to use a broker - I used London and Country, found them very helpful so maybe give them a call. I have one mortgage with nationwide and one with First Direct. First direct would not offer a second mortgage, which was a shame, their rates were best (for me).

bouncerdrum

Thanks for the replies - my income is in the £65 - £70k bracket - will this help to secure a higher LTV deal?

kingstreet

No. Affordability is affordability and loan to value is loan to value. You don't get one because of the other.

As long as the total debt is affordable, you'll get the maximum loan to value a lender will offer for a second property and I don't know any lender offering more than 90%.

Ozzuk

Sure it will help, my earnings are similar, totally depends on your outgoings...speak to a broker!

Sorry I didn't read that properly, no it won't help, I had to go 90% LTV and was told I wouldn't get a better deal on 2nd mortgage, and they really wanted 85%.

As another indicator, my original mortgage was only 35% LTV which helped.

bouncerdrum

Thanks for your replies - looks like I'm going to have to dig deep and find the extra money for a larger deposit on second property then

ACG

You might be able to raise it against your other property? - But that may then impact on affordability.

BROWNPJ130180

I am in a similar situation.

I have a property I joint own with my brother. The value of the property is approx £115k the outstanding mortgage on the is approximately £95k. My brother lives in this house and I just pay half the mortgage (£300pcm) - I view this as a pension investment for myself as I don't have any other pension arrangements (i'm 34 years old)

I am living in rented accommodation with my wife paying £850pcm. We would like to buy a property for us to live in (she has 3 children, I have 1 - they live with us 50% of the time).

We have £30k deposit and we know we can afford mortgage repayments of up to about £950pcm but because I have a mortgage already I have been told that I cant get another.

This seems crazy as we know we can afford it as we are paying £850 rent pcm already - please can anyone help us?!?

My salary is £20k, my wifes is £27.5k and we receive approx £525pcm in child benefit and child maintenance.

kingstreet

You can get another mortgage. The question is whether or not you will be able to borrow enough with your other property in the background, dependents etc.

Where have you been for help so far? If it's "the bank" you have been given one perspective only. Find an independent broker who deals with unusual things all the time where the computer says no, isn't usually how things work...