Buying and remortgaging

GH0ST

Hi,

I've been saving hard for a deposit for my first house and wondered if any of you know if the following is possible.

I have been to see some houses and will be making an offer within the next week however, there have been a few family problems and my mum is now left in the lurch with her mortgage. I have the opportunity to buy my mums house for around £50k (to clear the remaining mortgage) however, if I did, I would treat that as an investment for the future as my mum would still be living there (the actual value of the property is around £140k to £150k).

I was wondering if it was possible to buy myself a property but then possibly re-mortgage that/use as security against the purchase of my mums property somehow? The house that I buy myself initially will probably be around £20k short of the maximum lenders would lend me for a mortgage if that helps? My mum has a little bit of breathing room with her current lenders for 2 or 3 years (the end of the current term) and so I wouldn't have to buy this straight away.

Thanks for reading.

dc197

If I understand correctly, you want to buy one house with a mortgage. Then you want to take out another £50K mortgage for your mum's house but use the first house as security.
I doubt this is possible with two different lenders, and unlikely with the same lender. You'd have two mortgages on one house and no mortgages on the other. If you defaulted on the second mortgage, how would a lender claim your first house while there is another, possibly good-standing, mortgage on it?
The lender for the first house wants the first charge on it. Another lender would probably not accept holding a second charge over your first house, they'd also want first change.

You would probably need to use you mum's house as security for the loan you need to buy it. That would make it your second home and you might have to pay extra stamp duty on it at 5%.

Caz3121

whether you can release equity to purchase your mums house will depend on the lender (they may not release based on that reason) the LTV and affordability
what deposit and LTV would your own property be?

GH0ST

Hi - thanks for the replies.

dc197 wrote: »

If I understand correctly, you want to buy one house with a mortgage. Then you want to take out another £50K mortgage for your mum's house but use the first house as security.
I doubt this is possible with two different lenders, and unlikely with the same lender. You'd have two mortgages on one house and no mortgages on the other. If you defaulted on the second mortgage, how would a lender claim your first house while there is another, possibly good-standing, mortgage on it?
The lender for the first house wants the first charge on it. Another lender would probably not accept holding a second charge over your first house, they'd also want first change.

You would probably need to use you mum's house as security for the loan you need to buy it. That would make it your second home and you might have to pay extra stamp duty on it at 5%.

Yes, if possible that's what I was thinking of doing. Would another alternative be that she releases some equity somehow to pay off her mortgage?

Caz3121 wrote: »

whether you can release equity to purchase your mums house will depend on the lender (they may not release based on that reason) the LTV and affordability
what deposit and LTV would your own property be?

I'll be looking to spend £105k to £120k on my own actual property and can put anything from £5k to £8k down as a deposit.

marliepanda

GH0ST wrote: »

Hi - thanks for the replies.



Yes, if possible that's what I was thinking of doing. Would another alternative be that she releases some equity somehow to pay off her mortgage?



I'll be looking to spend £105k to £120k on my own actual property and can put anything from £5k to £8k down as a deposit.

You're looking at <5% deposit in most of those situations...

You can't remortgage and take out extra money you don't have. You'd have a £162k mortgage on a £120k house using 8k and 120k house as an example...