2nd mortgage advice...


F

FatFreddy

Hi all,

I'm looking for some informal advice.

I'm looking to buy a house, but keep on the flat I bought 7 years ago
and rent it out. In terms of monthly payments there's no concerns, but
the mortgages I've looked at will only give me 85% of the property
value as I'll have "aggregate debt" with keeping the flat as well. The
flat should have gone up considerably in value, but even so is only
worth about a quarter of what the house is.

But I'd really rather get 90% of the property value, so I was wondering
if the following option might work :

- I use the 'new house deposit money' to completely pay off the current
mortgage on the flat.

- I reapply for the mortgage on the house, presumably getting 90% LTV
as I have no 'aggregate debt'

- I then take out a BTL mortgage on the flat to get back the same
amount of cash that I used to pay off the original mortgage.

As you might have guessed, I'm not exactly familiar with the workings
of mortgage's etc, but if anyone could advise if this might work, or
any other solutions to get round what I see as a 'red tape' problem,
I'd deeply appreciate it.

Thanks in advance if you can.

C.
 
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R

Richard Faulkner

In message said:
Hi all,

I'm looking for some informal advice.

I'm looking to buy a house, but keep on the flat I bought 7 years ago
and rent it out. In terms of monthly payments there's no concerns, but
the mortgages I've looked at will only give me 85% of the property
value as I'll have "aggregate debt" with keeping the flat as well. The
flat should have gone up considerably in value, but even so is only
worth about a quarter of what the house is.

But I'd really rather get 90% of the property value, so I was wondering
if the following option might work :

- I use the 'new house deposit money' to completely pay off the current
mortgage on the flat.

- I reapply for the mortgage on the house, presumably getting 90% LTV
as I have no 'aggregate debt'

- I then take out a BTL mortgage on the flat to get back the same
amount of cash that I used to pay off the original mortgage.

As you might have guessed, I'm not exactly familiar with the workings
of mortgage's etc, but if anyone could advise if this might work, or
any other solutions to get round what I see as a 'red tape' problem,
I'd deeply appreciate it.

Thanks in advance if you can.

C.
I've done this sort of thing a few times:

What are the figures?

I.e.

Value of Flat, and existing mortgage amount. (I'm guessing that the flat
will be worth a lot more than you paid for it, and hoping that you have
not remortgaged it to the hilt?)

Value of House.

Money available.


In simple terms - Borrow up to the max on the flat. Use this as deposit
money on the new house, and get a BTL mortgage on the house.

Or ... there are such things as Let to Buy mortgages, where you declare
exactly what you are doing.
 

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