How to buy a second house

Gavin74

Hello.
My wife and I own our home outright.
We'd like to buy another house for a family member to live in, but for that we would need a mortgage and we don't have enough for a deposit.
Can we mortgage our current house to raise the money to buy the other house?
The only suggestions I can see online are to raise the deposit from the equity in this house, then get a mortgage for the other. Which sounds like 2 mortgages?

JuzaMum

You can remortgage to get the deposit. How is the mortgage for the second property going to be paid? Btl lenders don't like letting to family members.

Gavin74

I won't be letting to family members, they'll just be living there.
So I can't finance the whole of the purchase from the equity in the 1st house?

Soot2006

If you have the equity, then yes, you take a mortgage on your primary residence and use that money to buy the new place outright. I know many people who have done this to buy a flat for the kids, etc

Don't forget the extra stamp duty in your calculations.

Chris_English

When you say buy it with the equity in your current house, what do you mean exactly?

The normal way to do this would be to remortgage your current house for a larger amount, which you need to have enough equity in gthe current house to do. You then use the cash that this gives you as a deposit for the second home, or, if it's more than the purchase price, you can buy it for cash.

We bought a second home this way, remortgaged our main home, took the cash out and used it to buy a second home un-mortgaged.

Flugelhorn

you can just get a mortgage on your own house and then pay the deposit out of it and then pay for the house.

I did this with a house I owned outright, applied for a mortgage with the bank - don't remember having to tell them what I wanted to do with the money but it was a few years back and maybe they are more questioning now