Mortgages that consider assets

perrita

Hello

I currently own my property outright (worth about £100k) which I do not want to sell but I want to raise funds to buy a house worth about £350k. I would live in the second house, and rent out the first. Based on my income as self employed, I can get a mortgage for around £180k and I can get a cash deposit together to cover the rest.

Are there any mortgages out there that would take into consideration the assets that I have without me losing ownership of the property? I was thinking that's how an interest only mortgage would work but after reading up on it, it seems that it doesn't.

Any advice would be greatly appreciated! Thanks.

ACG

In short no, lenders have to ensure you can afford the mortgage. Assets just confirm you canc over the mortgage should you fall in to arrears, lenders do not want you in arrears.

You could raise around 75-80% against the current property on a buy to let basis but that still leaves you a very large shortfall.

perrita

I was wondering if there was anything similar to an interest only mortgage where in I would get part of it on repayment, and then £100k on interest only as at the end of the term I would then be able to sell this property to pay off the remaining mortgage.

lovinituk

Don't forget the additional 3% stamp duty on the second property too. On a £350k property that's an additional £10500 extra stamp duty on top of the £7500 basic stamp duty.

ACG

You still need to be able to afford the interest only mortgage now and evidence you can pay it off in the future. If you remortgage your current property to fill the gap, you can not evidence being able to clear the interest only element and if you do not, then you can not get remotely close to the figures you are looking for.

Its very rare I would say this, but I think what you want is out of reach by quite some way.

perrita

I think you're right. It's difficult because it feels so close, if I sold the first property we wouldn't have an issue but I suppose you can't have your cake and eat it too! Thanks.

amnblog

You are £100K short and your property is worth £100K?

There is your answer.

No Lender is going to lend against the property without some equity left in. You might raise £75K or £85K against it.