Second mortgage on new house?

scottiejunior

Hi all,

Just looking for a bit of advice please I currently have a house with a mortgage at 68% ltv.

We have gone halfs on a piece of land (paid cash) with a friend (investor). My oh is the builder who is building the project and the investor has borrowed the funds to pay for the building work.

We are considering moving in to one of the houses but we will need an additional mortgage to pay for the 60-70k we will owe the investor for the building work (there will be a charge on my land).

We are not in a position to sell our house fast as there are numerous things that are half done in the house.

I know it's difficult to say without looking in to my circumstances but what's the best way to tackle this? Worst case we will just have to put our house up for sale but really didn't want to do this until the house is complete to make sure we get the best money. FYI the investor will want his money back ASAP and won't want to wait until our house is sold before us moving in to one.

Any advice appreciated

kingstreet

Additional borrowing from existing mortgage lender, secured loan from third party provider such as a finance house, leaving existing mortgage alone, or remortgage to new lender to repay existing mortgage and raise additional funds?

scottiejunior

Sorry should have said before I don't have enough equity in our house to cover the 70k :-/

kingstreet

So what are you trying to get a second mortgage on?

scottiejunior

It's to basically pay of the building costs of ours new house (to pay off the investor)

scottiejunior

We own the land already and own the equity in the new house just need a mortgage for around 70k on a house worth 180 ish

Just worried as I have a mortgage on my current home if that makes sense

amnblog

Can you let out your current house? If so that is a potential solution as it may not affect the new mortgage.


If your personal income can support both mortgages that is another issue.


Otherwise you need specialist short term lending.


Either way you need a mortgage broker.

scottiejunior

Thanks, I thought about letting out our current house. Worst case I'm going to have to wait until ours is finished then sell it and pay the the investor the interest on the loan in the mean time eeeek

I think my income would be fine for the lend, does the lowing ltv go in my favour?

Thanks again everyone

Thrugelmir

scottiejunior wrote: »

own the equity in the new house just need a mortgage for around 70k on a house worth 180 ish

Until the house is built there's no equity. The fact that the land is jointly owned also adds a further degree of complexity.

dimbo61

If you can get all the jobs that need doing on your house finished first.
That may improve LTV and make it easier to sell or Let out.
The Investor will have to wait for his/her money until the house/houses are built and sold for a return on the investment