Can I Have Multiple Mortgage? | MoneymanTV
There are multiple reasons why some homeowners in Lincoln may look to obtain a second mortgage. One example of this would be if you are looking to expand your property portfolio and you need to obtain a mortgage to do this.
Alternatively, you may find that you need to take out a second mortgage if you have a family member who is unable to qualify for a mortgage themselves, obtaining a mortgage in your name and allowing them to live in the property.
If the lender can see that you cannot afford the costs involved with a second mortgage, then your application will be denied.
As a trusted Mortgage Broker in Lincoln, we have seen people apply for a second mortgage for all kinds of different reasons. Here are a few reasons to consider one.
If you are over five years into your mortgage term, then by now, you should have built yourself up a reasonable amount of equity in your home.
This situation is known as a further advance. A further advance is when you borrow more from your current lender to fund something like home improvements or a second mortgage.
What you do with that money is completely your choice, after all, it’s the equity you have built up in your own home. Some people use it to fund the deposit of another mortgage, whilst others may use it to take their dream holiday. There are no limitations once you’ve withdrawn that equity.
The amount that you can borrow from them will depend on the amount of equity in your property. Your lender will need strong evidence to prove that you can afford both mortgages. Our mortgage advisors in Lincoln can access competitive second mortgage deals and options through our large panel of lenders.
Whether you are a landlord with experience within the market already or someone new looking into making their first investment on a property, you will need more than one mortgage to achieve your goals.
Buy to let landlords will likely use a suitably extensive portfolio to the process of getting more than one mortgage. For those starting as a landlord, sometimes you need Mortgage Advice in Lincoln to make sure everything gets sorted.
Second mortgages work similarly to other mortgages. You still need to put down a deposit (usually around 15%-25% of the property) and pass the lenders’ affordability checks. Affordability does not always come down to your income, and some lenders will look into the predicted rental income.
No doubt, once the landlord has found tenants and they have moved in, the costs of your mortgage payments should be sufficiently covered. Initially, though this might prove challenging, you need to cover the expenses until the income starts to flow.
For Buy to Let Mortgage Advice in Lincoln, please feel free to book yourself in for a free mortgage appointment to speak with one of our Mortgage Advisors here at Lincolnmoneyman.
This sort of process is what is known as a let to buy mortgage. Some homeowners will have an option to get a second mortgage on a newly purchased home, allowing them to rent out their current home and move into a new home for themselves.
Let to buys are of course very similar to buy to lets, it just works a little bit differently. In this case, you need to find a tenant for your current property, in order to move out yourself. Landlords may do this if they want to move into a bigger family home.
Our buy to let Mortgage Advisors in Lincoln have a lot of experience and knowledge in working with let to buy mortgages, so get in touch if you would like an advisor to help you with a let to buy second mortgage.
If you have any children or other family members who are having some difficulty getting themselves onto the property ladder, you may have the option to take out a mortgage in your name and allow them to move into it as their new home.
Going down this route will likely land you with a guarantor mortgage. Another popular option that some people go with is to gift the person in need their deposit. Gifted deposits are crucial to the property market and are always a fond option for helping a loved one find their footing on the property ladder.
There are various reasons why you can be listed on two mortgages. Sometimes it’s something you’ve planned for, but in other cases, it can be completely unintentional.
Through our work as a mortgage broker in Lincoln, we regularly find that one of the most common reasons for someone taking out a second mortgage is divorce or separation.
The tricky part here is that it can be hard to remove your own or your ex-partner’s name from the mortgage you share. Once again, this is down to affordability and to both parties having to agree mutually. Though it may come with challenges, obtaining a mortgage post-divorce or separation is not entirely impossible.
If you have your name on an existing mortgage for a home you no longer live in, we recommend you look at getting your name removed sooner rather than later.
Having any financial ties to someone may lower your overall credit score, especially if the other person is terrible at managing their finances and getting into arrears regularly.