Releasing equity to buy 2nd home

Maxine51

Hi, I have a house with just a small mortgage left - Im wondering if its possible to release equity/remortgage this house to purchase a 2nd house so that we can prepare that house move into it and later sell our original house.

Is anybody aware if this type of financial arrangement is possible?

sam2015_2

It is possible but not financially worth it.
you will have to remortgage to buy to let and pay higher stamp duty on your new purchase(you'll get that back if you sell within 3yrs), remortgage application fee, product fee, solicitor fee.
I'm not sure about the taxes when selling a buy to let property...there might be some.

churun

I am looking at doing something similar myself. You will need a let-to-buy mortgage. I came across this article yesterday which sums up your situation pretty well - I can't post links here, but if you Google "Should I get a let-to-buy mortgage to purchase a new home?" and click on the link to the Guardian site you might find that useful.

R34GTT

Why does it need to be a let-to-buy or buy-to-let mortgage?
The OP is not interested in letting it out so a second residential mortgage would be OK in theory. The main issue would be the affordability checks on the second home mortgage as you would need to be able to comfortably pay the original and second mortgage/homeowner loan plus the third mortgage on the second property.

Maxine51

Thanks for your replies - yes I don't want to let one out but more than likely travel between the two properties for a couple of years. I don't have a cash deposit for a 2nd purchase - so in my dream world was remortgaging property 1 for a longer term mortgage and using the remortgage funds to buy a 2nd property.