There are many reasons why someone may want a second or even third mortgage. For example, another mortgage could be used to expand your property portfolio or to help one of your family members to move into a property.
It may be harder to get a second mortgage compared to your first one as you now have two sets of mortgage payments to account for. You will never get your second mortgage application accepted if you cannot afford the costs that will come with a second mortgage.
As a mortgage broker in Nottingham, we’ve seen people apply for a second mortgage for lots of reasons:
If you’re more than five years into your mortgage term, it’s likely that you’ve built up some equity in your home. If you have equity in your home, you can withdraw some of it and turn it into cash. This can be done in the form of a second mortgage.
It’s up to you what you do with the money that you’ve raised through the equity in your home. Whether you want to use it for another mortgage deposit or for something else it’s completely up to you.
Releasing equity within your home can be quite a difficult process. We would recommend speaking with a specialist mortgage advisor in Nottingham like us. Our advisors can access competitive second mortgage deals and options through our large panel of lenders.
Whether you’re an experienced landlord with current buy to let properties or an aspiring buyer who’s thinking of delving into the depths of the buy to let industry, you’re going to need more than one mortgage. Buy to let landlords with large portfolios will be used to the process of getting more than one mortgage, but if you are just starting off or own a couple, sometimes it can still be best to get buy to let help.
Second mortgages in the form of buy to let work similarly to your current mortgage. You still have to qualify for the mortgage, put down a deposit (usually 15%-25% of the property) and show that you can afford two sets of mortgage payments.
Of course, your mortgage payments should be covered once you find tenants to live inside the property, however, you may not find some straight away so you need to be able to manage the payments beforehand.
For buy to let mortgage advice in Nottingham, feel free to get in touch with our buy to let advisors today.
Otherwise known as a let to buy mortgage, there’s an option to get a second mortgage on a newly purchased home so that you can rent out your current one and live in your new property.
This works in a similar way to buy to let, it’s just the other way around. You’re planning on finding a tenant for your current property so that you can move out. Usually, landlords will build their portfolio this way when they want to move into a bigger home themselves.
Our buy to let mortgage advisors in Nottingham also specialise with let to buy mortgages, so get in touch if you need help with your let to buy second mortgage application.
If your children/family members are struggling to get themselves onto the property ladder, you can take out a second mortgage in your name and let them move into the property. If you want to go down this route, it’s likely that you end up with a guarantor mortgage.
Another popular option is to gift a deposit. Gifted deposits can be a great way to help get your close ones onto the property ladder when they are struggling.
In some situations, you can be listed on two mortgages. Sometimes it’s unintended, sometimes it was planned.
However, as a mortgage broker in Nottingham, the most common reason we see for people being listed on two mortgages is because of a recent divorce and separation. Unfortunately, it can be hard to remove your own or your ex-partner’s name from a mortgage because both parties have to agree that it’s okay to do so and prove that they will be financially able to afford a mortgage on their own.
If you are trying to get a second mortgage because of the same or similar situation, it may be slightly harder but not impossible. Some lenders will consider your current personal situation and give you a bit of leeway.
If you’re named on an existing mortgage in a home that you’re not living in, it may be best to try and get yourself removed if you can. Being financially linked to someone can sometimes bring your overall credit score down, especially if the other party has bad credit.