2nd property - purchase/borrowing options

Cornucopia

IIUC = If I Understand Correctly...

lonestarfan

eaustin wrote: »

Thank you for your responses.

As suggested it may be simplest to buy the second property outright. I estimate that after clearing the current mortgage there would be a little over £50,000 available, this combined with a new borrowing against the existing property should give enough funds to buy a second property. I didn't want to give up my current low mortgage. At what LTV do you start getting access to better rates?

To answer some of the questions about why we would want to do it, well it's partly cultural, we want to help another family member. This might be slightly different to the traditional British culture. The intention was for P3 to be able to start investing in an asset.

I do not need to explain why P3 can't get a mortgage but I know what they can afford to pay as rent and I am happy to assess that risk.

Its not different to what you say "traditional british culture". This board is full of parents, children, aunts/uncles and godparents all from different cultures wanting to help their relations get on the property ladder and invest in an asset or sort out their existing mortgages. It does present considerations though such as what happens if any of the parties separate, dies, becomes ill and can't earn, wants to move, wants to do alterations to the property, disputes the arrangements, have a property insurance claim, maintenance issues, taxation, need to start claiming benefits and needs to be means tested etc. This board is equally full of posts asking for advice on break ups, divorce, illness, losing jobs etc and wishing they'd never got involved with sharing ownership amongst them.
As you say it's for you to assess the risk so all available info is important in coming to an informed decision.