2nd Property Mortgage

Jinx-Inc

I am hoping to purchase a property and have a mortgage for it but from using the various mortgage calculators online I won't be able to borrow as much as I require to purchase the new house. I do however own a property (inherited), this property has no mortgage and is paid for outright. I am wondering if it is possible to secure a mortgage against another property that is owned with no mortgage? The property I intend to buy is up for 123k and my house is with close to 200k.

Regards


Danny

Gorgeous_George

You could borrow the entire purchase cost of the 2nd property using the 1st (owned outright) property as security.

If you let the 2nd property, you can till offset the interest payments against rental income for tax purposes.

GG

silvercar

Depends what sort of mortgage you get on the owned property. If you go for a residential mortgage you would be restricted to 90% of its value and limited by your salary or affordability critera. If you went for a buy-to-let mortgage it would depend on the rental income.

Jinx-Inc

silvercar wrote: »

Depends what sort of mortgage you get on the owned property.

I don't understand sorry, I don't have nor need a mortgage on my current property as it's paid for so I don't see what you mean.

herbiesjp

What are your gross annual earnings?
What deposit do you have to put down?
Are you going to let out this property? If so what rental income would you expect to recieve?

Jinx-Inc

Gross Annual Earnings - 24k
I have money for a deposit but am hoping to get a 100% mortgage. What sort of figure would I needed for a deposit (roughly)
I am going to move into this property and sent my first property out, rental income on that would be around 700pcm.

Thanks for your replies

going2die_rich

Dont think you'll be able to find a 100% mortgage now. You are about 6 months too late for them.

silvercar

silvercar wrote: »

Depends what sort of mortgage you get on the owned property. If you go for a residential mortgage you would be restricted to 90% of its value and limited by your salary or affordability critera. If you went for a buy-to-let mortgage it would depend on the rental income.

I thought you wanted to secure a mortgage on the owned property to give you the money to buy the new place.

If you got a mortgage on the owned place it would be a lower LTV than securing it on the new place and so you would benefit from a lower interest rate.

Jinx-Inc

Going2die_rich: it would seem you are 100% correct on that, just spoke to a friend about it at lunch and with what's going on atm I've got no hope for 100%.

Silvercar: I think I'm confusing the matter by my own lack of knowledge (trying to learn). What I wanted to do (or least that's what I thought) is to take out a mortgage on the new property using my existing one as security incase anything ever went wrong. From what you've said I can only gather your suggestion is to re-mortgage the owned property to the value of the 2nd property, this way it would be a lower LTV.

Please excuse my dumbness everyone.

Conrad

Silvercar as ever is correct as far as I can tell.

Also the mortgage on the existing property needs to be covered by the rent.