Raising money on one house, to buy another....
Discussion
Surely it has to be complicated......
I have found a property I really want. It is up for 100k. I own a property, no mortgage, no debts on it, that is worth in the region of 500k. I have an income which means I can easily afford a 100k mortgage.
Is it as simple as finding a lender who will help make this happen?
Also, the 100k house is a holiday cottage. I don't want to rent it out, but would like the option to maybe ine day. In the first instance this would not be a commercial venture.
Just getting 100k mortgage on the second house, with a deposit is one asnwer, but I want the freedom of not having a mortgage on it so I could one day let it out if for example I find II don't use it much, or if in unforeseen future circumstances I need a bit of extra income.
I'd appreciate any advice.
Because I want the flexibility to rent it out as a holiday cottage. It has a rental income of 5k. My prime intention is not to rent, but if my circumstances change, say for example I get a job at the other end of the country, or need some extra income, I want to be able to let it with out having seek permission from a lender.
wildcat45 said:
Because I want the flexibility to rent it out as a holiday cottage. It has a rental income of 5k. My prime intention is not to rent, but if my circumstances change, say for example I get a job at the other end of the country, or need some extra income, I want to be able to let it with out having seek permission from a lender.
Then yes you can get a secured loan on your property.I would expect a mortgage lender to be quite happy to do that with an LTV that low.
HenryJM said:
Getting a mortgage on your current property shouldn't be a problem assuming you have income that covers it. 20% LTV means it's virtually no risk for the lender.
After the recent mortgage market review a lender can no longer agree a lend just because of a low LTV as this protects the bank rather than the customer. It's all about the ability to service the debt.
MRSNEAK said:
HenryJM said:
Getting a mortgage on your current property shouldn't be a problem assuming you have income that covers it. 20% LTV means it's virtually no risk for the lender.
After the recent mortgage market review a lender can no longer agree a lend just because of a low LTV as this protects the bank rather than the customer. It's all about the ability to service the debt.
What was it about what I wrote that dismissed that? The bit about having the "income that covers it" should be clear.
You need an acceptable LTV and the income.
MRSNEAK said:
This bit "20% LTV means it's virtually no risk for the lender".
To me that could mislead another reader and I thought it worthwhile pointing that out despite your comment on the need for income.
Well I suggest that you read and digest the whole of the posting in the future. As stated the "20% LTV means it's virtually no risk for the lender", but they will require "income that covers it".To me that could mislead another reader and I thought it worthwhile pointing that out despite your comment on the need for income.
It's really hard to see how that is misleading.
wildcat45 said:
Surely it has to be complicated......
I have found a property I really want. It is up for 100k. I own a property, no mortgage, no debts on it, that is worth in the region of 500k. I have an income which means I can easily afford a 100k mortgage.
Is it as simple as finding a lender who will help make this happen?
Also, the 100k house is a holiday cottage. I don't want to rent it out, but would like the option to maybe ine day. In the first instance this would not be a commercial venture.
Just getting 100k mortgage on the second house, with a deposit is one asnwer, but I want the freedom of not having a mortgage on it so I could one day let it out if for example I find II don't use it much, or if in unforeseen future circumstances I need a bit of extra income.
I'd appreciate any advice.
I'm a broker and can help if needed. I have found a property I really want. It is up for 100k. I own a property, no mortgage, no debts on it, that is worth in the region of 500k. I have an income which means I can easily afford a 100k mortgage.
Is it as simple as finding a lender who will help make this happen?
Also, the 100k house is a holiday cottage. I don't want to rent it out, but would like the option to maybe ine day. In the first instance this would not be a commercial venture.
Just getting 100k mortgage on the second house, with a deposit is one asnwer, but I want the freedom of not having a mortgage on it so I could one day let it out if for example I find II don't use it much, or if in unforeseen future circumstances I need a bit of extra income.
I'd appreciate any advice.
You're right to do it the way you have suggested. Mortgages on holiday lets can get extremely difficult to secure, especially if the property is potentially unoccupied for extended periods over the winter.
Very easy to do, this is how I funded my first BTL.
You can also offset the mortgage costs against income from property 2. All you need to do is be able to prove that the cash was borrowed to fund the purchase.
Their fact that's it's secured against property one is not an issue. It's the purpose of the loan, not the security that counts.
You can also offset the mortgage costs against income from property 2. All you need to do is be able to prove that the cash was borrowed to fund the purchase.
Their fact that's it's secured against property one is not an issue. It's the purpose of the loan, not the security that counts.
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