is collateral acceptable when applying for a mortgage

fireballpaul

so if you own your own house can you put that up as a back up if anything were to go wrong on the 2nd home.?   Old house worth twice as much as the new one so it's well covered. 
  

amnblog

In short, no, not a standard mortgage arrangement

MyRealNameToo

You can take a mortgage out on the old home and use it to fund your new purchase

kingstreet

Cross-charging ended some years ago when the One Account was closed to new business.

MyRealNameToo

kingstreet said:

Cross-charging ended some years ago when the One Account was closed to new business.

Which? has a June 2025 article recommending cross charging for buying property overseas? I'm no fan of Which? but wouldnt have thought they'd recommend something thats no longer possible and would be surprised if lenders were that interested on what you are wanting the cash for when releasing equity from your current property as long as affordability etc all adds up. 

ACG

MyRealNameToo said:

kingstreet said:

Cross-charging ended some years ago when the One Account was closed to new business.

Which? has a June 2025 article recommending cross charging for buying property overseas? I'm no fan of Which? but wouldnt have thought they'd recommend something thats no longer possible and would be surprised if lenders were that interested on what you are wanting the cash for when releasing equity from your current property as long as affordability etc all adds up. 

They are very interested.
Business investment - why? Planning leaving job? 
New property? - why? Are you moving, what will the running costs of that property be? 

I remember working for a bank and an application came in where the applicant wanted to knock down the property and rebuild it. We declined the application... until he told us he had already knocked the house down. Then we had to lend him the money. 

What about if your plan is to put it on Black at the casino or go and buy £100k of Colombias finest as a business investment? 

The lender wants to know. Some will have restrictions, some wont. 

But most wont take out an equitable charge over multiple properties. It can be done, but only in certain circumstances and will come at a premium. 

MyRealNameToo

ACG said:

MyRealNameToo said:

kingstreet said:

Cross-charging ended some years ago when the One Account was closed to new business.

Which? has a June 2025 article recommending cross charging for buying property overseas? I'm no fan of Which? but wouldnt have thought they'd recommend something thats no longer possible and would be surprised if lenders were that interested on what you are wanting the cash for when releasing equity from your current property as long as affordability etc all adds up. 

They are very interested.
Business investment - why? Planning leaving job? 
New property? - why? Are you moving, what will the running costs of that property be? 

I remember working for a bank and an application came in where the applicant wanted to knock down the property and rebuild it. We declined the application... until he told us he had already knocked the house down. Then we had to lend him the money. 

What about if your plan is to put it on Black at the casino or go and buy £100k of Colombias finest as a business investment? 

The lender wants to know. Some will have restrictions, some wont. 

But most wont take out an equitable charge over multiple properties. It can be done, but only in certain circumstances and will come at a premium. 

I will defer to your greater experience, my experience (mainly outside of mortgages) is there is limited interest from creditors as long as affordability is passed, which would include any changes in living costs were it to fund another purchase. 

I helped out a sibling with a substantial loan, that was big enough to be a mortgage were we not renting at the time, chose the "other" option on the reason for lending and money was in the bank within the hour. Similarly with prior cases was a simple list of options with no followup on evidence it was used for that purpose etc. 

ACG

I think loans are a little different to mortgages. Theoretically you can have credit cards with £20k limits and nobody will ask what that is for if you bunged £20k on it. 

But with mortgages typically being larger than loans, the questions asked are more thorough. 

MyRealNameToo

ACG said:

I think loans are a little different to mortgages. Theoretically you can have credit cards with £20k limits and nobody will ask what that is for if you bunged £20k on it. 

But with mortgages typically being larger than loans, the questions asked are more thorough. 

CCs are different because they are revolving credit plus you dont ask for a limit typically.

Loans are a better parallel given its a once only fixed sum and the aforementioned Barclays loan was £50k so in small mortgage territory. I would imagine other banks aimed at the wealthier end of the market will have larger options available, I see Arbuthnot Latham offer up to £0.5m in a revolving credit loan account. 

In principle with loans they could take the same level of interest, especially at the higher ends but they dont. 

ACG

I imagine £500k would require a few more questions.

Looking at the Barclays website, they seem to be quite relaxed on additional borrowing up to £50k. Beyond £50k you need Independent legal advice by the looks of it.

MyRealNameToo

ACG said:

I imagine £500k would require a few more questions.

But its revolving credit so there can be some initial questions when setting it up but it doesnt work conceptually if you are asked questions each time you make a withdrawal from it.... would be like your bank phoning you and asking what you're wanting to buy when you do a chip and pin transaction somewhere.