Second property close to my first, mortgage issues?

boxrick

Hello!

I wish to buy a property fairly close to one I already own by way of a "second mortgage". (Around 7 miles away), it is in the local city centre and I'm in the suburbs.

This won't be rented out and I'll be living in both properties. 

So simply put, I know lenders are a little funny about second homes and the circumstances around them.

Technically this will simply be a holiday home considering I'll be spending time in both.

Is this going to be an issue to lenders given the close proximity? Is it worth pursuing a different path?

K_S

@boxrick It's hard to predict the outcome (as it will also depend on the other background details to the case) but generally speaking the lender will want to be sure that it isn't a backdoor BTL. The reason being a second home barely 7 miles away from your primary residence doesn't really help the case. It would be different if (say) you lived in the outer reaches of Essex + worked in London and wanted to buy a pied-à-terre in/around Central London.

It would help your case if it was a low LTV purchase, thus taking away the possibility that you're trying to get around the minimum deposit required for a BTL mortgage.

boxrick

Thanks for the reply, additionally I'm happy to buy it as a BTL mortgage. But it would never be rented and they would start asking for rental values im sure. 

This particular property is in central Manchester. So I guess that would help my argument?

I was going to do around an 80% LTV. 

K_S

@boxrick A BTL wouldn't work as you aren't allowed to use it as a residence.

At 75-80% LTV you should be ok even if you are knocked back by the first lender you go to.

Thrugelmir

boxrick said:

This particular property is in central Manchester. So I guess that would help my argument?

Underwriters will be cautious. Applicants are often known not to be truthfull or subsequently change their minds. No point in arguing. What you need to provide is convincing reasoning. 

boxrick

I have a mortgage meeting next week then will go to Underwriters.

I have applied as a pied-a-terre with the justification being I will be frequently getting the train for work. Given its central location and ease of getting the train to London. Which from my current property is significantly more time consuming even given the vicinity. 

I guess this is likely to be denied though?

simon_or

I have no idea how banks will see it but having lived in Manchester I am genuinely curious about where you live that's 7 miles from the centre and takes you more than 20-30 minutes to get to Picadilly station?