Residential mortgage on second/background home

280FBBA

Hi all,
great forum with interesting information - first poster. Wanted to run the below scenario before approaching mortgage broker so can understand my options.

I currently own a mortgaged property where I reside with my wife, jointly owned. Our mortgage is £440k and property is currently worth £750k approx - property 1. I also own another property, mortgage free, with my sister (tenants in common 50/50), where she resides with my parents (who have no interest in the property) and the property is currently worth £800k - property 2.

On property 2 we have recently been given planning permission by the council to build on top of the garage which would add two bedrooms and one/two bathrooms, and a study/spare room.  The foundations below the ground are already in place to support this from a previous extension. My sister and I would look to raise a £100k mortgage on the property 2 to complete the extension and also complete some general home improvements.

My sister earns £30k pa self employed; She is single with no dependants, and would continue to reside in the property with my parents. She also has a BTL property worth £250k with a 70% mortgage. I earn £75k pa full time, and married with 1 dependant. I will continue to reside in property 1. We both have good credit history with no adverse credit.

Regarding raising a mortgage on property 2,  my sister and i would need the property to still be owned jointly so assume both of us need to be on any mortgage application. Given the separate circumstances of us both, and the fact that the property is not my primary residence, is this a complex mortgage case / do I need a specialist lender who would lend based on all of the above facts and circumstances?

Also, would potential lenders consider (for affordability) my full mortgage obligation at property 2 or 50% given it’s jointly owned with my wife? I assume the mortgage on property 1 greatly impacts the affordability.

Thanks in advance for thoughts/feedback. 

MWT

I'll let the brokers comment on the complexity, but it looks like the only missing pieces of information are, does your wife have any income? ... and is your sisters BTL self-financing through rental income?

280FBBA

MWT said:

I'll let the brokers comment on the complexity, but it looks like the only missing pieces of information are, does your wife have any income? ... and is your sisters BTL self-financing through rental income?

Thanks, my wife has full time income of £42k pa, and confirmed my sisters BTL is fully let out to tenants.

280FBBA

280FBBA said:

Hi all,
great forum with interesting information - first poster. Wanted to run the below scenario before approaching mortgage broker so can understand my options.

I currently own a mortgaged property where I reside with my wife, jointly owned. Our mortgage is £440k and property is currently worth £750k approx - property 1. I also own another property, mortgage free, with my sister (tenants in common 50/50), where she resides with my parents (who have no interest in the property) and the property is currently worth £800k - property 2.

On property 2 we have recently been given planning permission by the council to build on top of the garage which would add two bedrooms and one/two bathrooms, and a study/spare room.  The foundations below the ground are already in place to support this from a previous extension. My sister and I would look to raise a £100k mortgage on the property 2 to complete the extension and also complete some general home improvements.

My sister earns £30k pa self employed; She is single with no dependants, and would continue to reside in the property with my parents. She also has a BTL property worth £250k with a 70% mortgage. I earn £75k pa full time, and married with 1 dependant. I will continue to reside in property 1. We both have good credit history with no adverse credit.

Regarding raising a mortgage on property 2,  my sister and i would need the property to still be owned jointly so assume both of us need to be on any mortgage application. Given the separate circumstances of us both, and the fact that the property is not my primary residence, is this a complex mortgage case / do I need a specialist lender who would lend based on all of the above facts and circumstances?

Also, would potential lenders consider (for affordability) my full mortgage obligation at property 2 or 50% given it’s jointly owned with my wife? I assume the mortgage on property 1 greatly impacts the affordability.

Thanks in advance for thoughts/feedback. 

Just to add, if anyone has info on how lenders view residing in a main residence with a mortgage and raising a joint mortgage on another residence that you don’t live in, or use as a second home formally (but in reality, this is my family joke so sort of is my second home given I own it)

cheers 

dimbo61

You need help from a whole of market mortgage broker and maybe your sisters accountant.
Complex does not come into it

They would need to look at the full picture with so many details that you would not want on a public forum.
Age, income, credit file/score, job, pensions, LTV, purchase price, values of properties, savings, quotes for work involved, Tax position, yield on BTL and rent, 
Pay for professional help 
So ask family or friends or Google local companies 
Some of the posters on here are mortgage brokers