Mortgage extension for second home

"ian" wrote

Yes, as long as someone will lend you the extra 50k. A 150k mortgage on a

300k property is a pretty low loan-to-value ratio - which is good, from a lender's perspective.

Sure.

All the time, to the first question. Many have increased their mortgage not to buy bigger houses, but to buy consumer goods such as cars.

To the second, it's only foolish to increase your borrowings to a level you can't afford to repay.

I'm doing something similar. My main concern is to make sure that the next move is the final one. The level of stamp duty these days means the cost of actually moving is very, very steep and not something you want to incur twice if you can get it right first time.

You pay your money and take your choice. What is your view of property prices? Do you expect them to fall? How much would it cost to rent the type of house you would like? Have you an arrangement in place to pay off your mortgage?

You have various options but you need to make the decisions for yourself.

If you sell and rent house prices may fall and you could get more for your money. Then again they could rise and you would be further off buying the house you want.

Can you afford to repay a 150k loan every month? You should get a 150k mortgage pretty readily on a 300k house if your income justifies it. Even if it doesn't you might be able to persuade somebody to give you the mortgage, but could then fall into trouble paying it.

You wouldn't increase your current mortgage, but would have to get a new one. You will need to pay off the lender when you sell your house, but could have penalties to pay as well, depending on your mortgage.

You need to visit some professionals to get some advice specific to your own circumstances, but much of it will depend on what happens to house prices and interest rates. Your guess could be as good as any of ours.

Neb

Provided your earnings are high enough to pay off the higher loan, it shouldn't be a problem. It happens all the time.

Ian

What you are talking about happens everyday actually 1000+ every day you're selling a house and walking away with 150K equity. at ING for instance you'd get 5% interest which is 7.5K PA which would pay the rent on a very nice house assuming you're going with the concensus that house prices are falling therefore don't want to plough your money into one just yet.

Failing that, I'm assuming from your post that you are mid forties and thinking about planning for your retirement and the children's education and all the costs that go with that.

Best advice is to speak to an IFA, it's what they're paid to do, mail me and I'll give you the details of my one he's very good and gets paid by the bank so no commitment and no pressure but with a 50% deposit you will have NO difficulties securing a mortgage.

BR

Jason

In message , John Redman writes

What John says is correct, but this bit may bit a little misleading in so far as you dont want to find a mortgagee who will lend the 'extra' £50k, but a mortgagee who will lend you £150k and replace the original £100k. This could be your current lender.

Go to an INDEPENDENT mortgage broker. Be aware that the definition of 'independent' changes from 1 November, so make sure you see the word 'independent'.

In message , Jason Power writes

Yes, but make sure he is authorised to give mortgage advice.

Please tell me of a bank where the salesman is an IFA (as opposed to a Financial Adviser) and is also NOT on a commission or target for sales.

Thanks very much everyone. Excellent guidance and I feel I do now understand :-

It's not unusual to replace/increase my mortgage, but I need to consider if I can actually afford it.

I don't think I'll opt out of the market completely simply because it's too much worry and effort, and there's too much going on at the moment to take that extra level of grief.

Thanks again - your advice greatly appreciated!

ian.

IME if you ask those who are almost evangelical about there being an imminent house price crash coming (or even happening) you'll find very few of them have actually sold their houses :-) ...IIRC this was true of an economics professor who had a story about a crash published first page in the Times a couple of years ago, lucky he didnt act on his own advice!

"Tumbleweed" wrote

You noticed that too, huh?

M Holmes has been very knowing on this NG about how prices are going to crash 90%. I imagine he's short of a house.