2nd mortgage question

Richy2575

Hi all,

I have a question about what options i have in regards a 2nd mortgage.
I am 40y/o married and earn around 53k per year and own my current property outright with a market value of around 160k my wife does not work and we have around 10k in savings.
I would like to buy another house for my parents to live in as they are both nearing retirement and currently renting with little in the way of savings.
I would not expect them to pay rent so hoping to steer clear of BTL and just get a 2nd residential mortgage is this possible? can anyone offer any advice on what my best way forward would be?
I would be looking at houses in and around the 130k mark so could i free up some equity on my home to bump up the deposit and get a better deal?

Any help would be great.

lovinituk

Dont forget the extra 3% stamp duty you will be liable for on the second property.

Bravestar

Richy2575 wrote: »

Hi all,

I have a question about what options i have in regards a 2nd mortgage.
I am 40y/o married and earn around 53k per year and own my current property outright with a market value of around 160k my wife does not work and we have around 10k in savings.
I would like to buy another house for my parents to live in as they are both nearing retirement and currently renting with little in the way of savings.
I would not expect them to pay rent so hoping to steer clear of BTL and just get a 2nd residential mortgage is this possible? can anyone offer any advice on what my best way forward would be?
I would be looking at houses in and around the 130k mark so could i free up some equity on my home to bump up the deposit and get a better deal?

Any help would be great.

You won't be able to get a second residential mortgage, if for no other reason than you won't be living in the new property.

BTL mortgages tend to cost more than residential mortgages.
Difficult to get BTL mortgage if you intend to le it to family.
If you intend to 'let' the property 'rent-free' then you by definition have no rental income to (a) help you 'afford' the second property or (b) offset against tax the mortgage paymenst thereon.

So as you don't actually have a residential mortgage (you say you own your residential home outright) then why not mortgage that to release funds to buy your lovely parents a house that you then own outright?

£160k property could easily release £128k equity based on 80% LTV
Your salary "should" fund that type of borrowing (subject to new affordability checks), and your age should still allow a 25yr mortgage without any issues

See a mortgage broker to get some more advice and possible alternative options:)

kingstreet

You can buy a property for relatives to live in with a residential mortgage. Obviously this will rely entirely on your personal income for affordability.

An independent broker will ensure you stay away from lenders who won't entertain this.