Getting a mortgage on a mortgage-free house

thiskey

My wife & I might be in a position to buy a house mortgage-free, with a plan to extending / renovating in a few years, paid for by a mortgage.

At a rough guess, the future mortgage might be for around 40% the value of the property.

This is obviously not the most common scenario for getting a mortgage.

Questions I'm trying to figure out are...

1. Would we need a cash deposit?
2. Would interest rates be relatively low because of the remaining equity?
3. Would the mortgage provider need to know specifically what we intend to spend the money on (the precise details of any extension, for example)?

Thanks for any advice.

Contemptuous

1. No

2. Yes, if they're anything like they are at the moment. Who knows.

3. Depends on the lender as to how much detail they'll want.

AnotherJoe

Agree with above.
No
Yes
Probably (and house improvements / extension would be one of the main acceptable reasons)

kingstreet

It's a remortgage of an unencumbered property.

If you plan to do this within six months of purchase, use the mortgage to buy it instead and keep some of the cash back for what you need to do.

Many lenders will not accept a mortgage application until a property has been in current ownership for six months or longer.

thiskey

Thanks everyone for the advice, much appreciated.