"Remortgage" on fully paid home

spamhater

I'm looking for some guidance here before I approach any more of the high street banks.

Partner and I currently own (mortgage fully paid off 10 years ago) our home.Current value somewhere around £250k.

We would like to purchase a home abroad (which we will rent out when not in use by us) and rather than mortgage the property abroad we would like to use some of the value of our current home by raising a mortgage. We are looking at needing £100k, perhaps less.

It would be a short mortgage term (somewhere between 12 and 18 years).

My question is, will any UK bank allow us to do this. I spoke to RBS (not a formal mortgage application, just an over the counter enquiry) who said they would absolutely not allow us to use the funds to buy a property abroad which would not be secured (although our main home would) however they would consider lending us 100k if we were say building an extension and refurbishing the existing home. They suggested I speak to a broker about an Equity Release loan if I was determined to go ahead - do these loans even still exist?
The reason I approachd RBS is that they lent us the original mortgage (now paid) and one of our salaries is paid to a current account there. We also hold savings with them.

I have no intentions of not being truthful about what we will do with the money, after all £100k is a bit amount of money however I'm now worried that the minute I mention property abroad nobody will lend us anything.

I genuinely though with a fully owned home, good incomes (we could borrow on one salary) and no loans, credit cared debts or so on we would be seen as sensible, prudent applicants so I'm gutted to have been told we won't even be considered. Is this likely to be a similar view from the other banks?

Any help appreciated.bthank you

kingstreet

It's a remortgage of an unencumbered property and if affordability is good, the purpose of loan won't be an issue for most lenders.

RBS are clowns, best ignored.

amnblog

kingstreet wrote: »

RBS are clowns, best ignored.

No sitting on the fence here

spamhater

Thank you Kingstreet. I genuinely believed that with a good affordability level, low LTV and honesty about what I was doing it would be ok. I wasn't prepared for the look of disgust that appeared when I mentioned buying a second home abroad or the swiftness of the comment that it would "absolutely" not be considered. I began to think if I'd said I wanted £100k to spend on sex and drugs it wouldn't have generated such an extreme reaction:)

spamhater

Just a thought - am I right in referring to it is a remortgage? My reasoning was that I'm not a first time buyer, it's not a buy to let as the letting will be on a different property and as the property once had a mortgage it will be a remortgage.

kingstreet

It's a remortgage of an unencumbered property, as I said in the reply I gave some moments ago...

spamhater

Thank you. Just wanted to make sure I didn't use incorrect terminology and cause confusion.