Remortgage and second property

nekr0mantik

Hi all

So if you want to re mortgage to get onto a lower fixed rate but you have joint mortgage since purchasing the older property then will that significantly increase the affordability criteria from lenders?

Thanks 

K_S

@nekr0mantik If you're looking to do a product-transfer/product-switch/rate-switch with your current lender, then the background property should have no impact as this should not involve any income/affordability checks or underwriting.

If you are looking to remortgage to a different lender then the new background property may well impact your affordability (as per lender calculations). What impact (if any) it has depends on whether the property is a rental, how big the mortgage is, whether it's I/O or capital repayment, etc. and may differ across lenders.

nekr0mantik said:

Hi all

So if you want to re mortgage to get onto a lower fixed rate but you have joint mortgage since purchasing the older property then will that significantly increase the affordability criteria from lenders?

Thanks 

nekr0mantik

K_S said:

@nekr0mantik If you're looking to do a product-transfer/product-switch/rate-switch with your current lender, then the background property should have no impact as this should not involve any income/affordability checks or underwriting.

If you are looking to remortgage to a different lender then the new background property may well impact your affordability (as per lender calculations). What impact (if any) it has depends on whether the property is a rental, how big the mortgage is, whether it's I/O or capital repayment, etc. and may differ across lenders.

nekr0mantik said:

Hi all

So if you want to re mortgage to get onto a lower fixed rate but you have joint mortgage since purchasing the older property then will that significantly increase the affordability criteria from lenders?

Thanks 

Hi

So the potential second property would not be a rental. Most likely to be interest only with around 150k outstanding and property worth around 300k. 

K_S

@nekr0mantik In that case it may have an impact on whether or not you can borrow what you need. What impact (if any) will depend on the specifics and the lender.

Perhaps you can try playing around with a couple of lender affordability calculators to get a very rough idea
https://www.santanderforintermediaries.co.uk/calculators-and-forms/affordability/
https://online.accordmortgages.com/public/mortgages/quick_enquiry.do

nekr0mantik

K_S said:

@nekr0mantik In that case it may have an impact on whether or not you can borrow what you need. What impact (if any) will depend on the specifics and the lender.

Perhaps you can try playing around with a couple of lender affordability calculators to get a very rough idea
https://www.santanderforintermediaries.co.uk/calculators-and-forms/affordability/
https://online.accordmortgages.com/public/mortgages/quick_enquiry.do

Ok thanks 

kingstreet

As an add-on, some lenders will treat the other mortgage like a credit commitment; while others will aggregate the two capital amounts. This can have an impact on the outcomes.