Second home mortgage?

jcgtc

My main home has very small mortgage, less than 10k left and value of property approx £275,000. Have plans to downsize in 3-4 years and would like to buy a home in countryside to renovate approx £150,000 what would be the best way to finance this? Interest only short term mortgage to pay off capital upon sale of existing home? Or remortgage existing home?

minimike2

IMO the best way to do it would be to re-mortgage your current property to raise the cash to buy the new one outright.

Main reasons for this are:-

1. You will benefit from a lower LTV product
2. You have only one property being used as security
3. You can raise more than the purchase price of the new property *if you need to in order to pay for the renovation costs*
4. Deals on fees on the mortgage (lenders will pay certian fees for you on re-mortgaging). Obviously it is still adviseable you have a suvery on the new property tho - but you will get a cheaper one going through a chartered surveyour than through a lender.
5. As a cash buyer you will have more bargaining power in getting the vendors price down and being able to move quickly you will be seen as more favourable.

Conrad

remo current home is far easier.