Can i buy a house with collateral of another house

Steve36homelife

Hi, just wondering as we dont know much about mortgages, my mum owns her flat 140,000 she wants to rent it out, an get another house with me on the mortgage i dont have a very good credit rating.but i have 5,000,6000 when i sell my caravan..together with her retirement money an my wages plus renting her flat, will be in the green of £2500 a month..what mortgage type do i need, will we be able to get one this way? She is 66 im 36.. Thank u

teddysmum

There are lots of threads on here, from experienced people, who describe the liabilities of being a landlord.


Buying a second property would mean your mum would have to pay the extra 3% stamp duty, as it's a second home.


Your mum's age and your financial situation would both be against a mortgage being granted, while just one of these would be enough for a refusal. (I know someone in their early fifties, with assets including a fully paid for house, being refused a mortgage for a second property of lower value, on age grounds.)

Cakeguts

How are you planning to pay both mortgages if you get a tenant who stops paying the rent? People just assume that their property is going to be easy to let and that lots of tenants are going to want to rent it. In reality your mum's flat might be extremely difficult to let and it may not be what good tenants want to rent.

This is not a good idea for your mum. At the moment she owns a property where she can live If she is living with you in a second property she could find that both properties get repossessed and she could end up homeless. This is a big risk for her and no risk at all for you.

You can't get the money out of you mum's flat unless you sell it or borrow money against it. If you borrow money against it you will have to pay that back that is why you will have two mortgages to pay monthly if your tenants stops paying rent. Is the £2500 per month before tax or after?

AdrianC

Oh, gawd, here we go again.

amateur_house

teddysmum wrote: »

Your mum's age and your financial situation would both be against a mortgage being granted, while just one of these would be enough for a refusal. (I know someone in their early fifties, with assets including a fully paid for house, being refused a mortgage for a second property of lower value, on age grounds.)

That seems harsh, I am mid-fifties and had no problem getting a mortgage recently. Admittedly 66 would be a bit different, being so close to retirement age.