Can You Have Two Mortgages in Sunderland?

Second Mortgage Advice in Sunderland

There are multiple different reasons why someone may look to obtain themselves a second or even at times, a third mortgage. A good example could be used as a means to grow your property portfolio. Alternatively, it can be used to house a family member.

Obtaining a second mortgage can be quite difficult, more so than your first one, as now you’re having to account for two sets of mortgage payments, which could have a knock-on your affordability. If you are unable to afford the costs involved with a second mortgage, the mortgage lender will not accept your application.

Why would I want a second mortgage?

As a trusted and dedicated Mortgage Broker in Sunderland, we’ve seen people apply for a second mortgage for all kinds of different reasons. These include;

• To raise money.
• Purchasing a new home to rent it out (Buy to Let).
• Renting out your existing home to purchase a new one (Let to Buy).
• Purchasing a home for your children/family member.
• Being named on an existing mortgage and wanting to purchase a new home.

Second Mortgage to…

Raise Money

If you happen to be over five years into your mortgage term, the chances are that you’ve built yourself up a suitable amount of equity in your home. You can withdraw some of this equity and turn it into cash, through taking out a second mortgage.

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 equity you’ve 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 There are no limitations once you’ve withdrawn that equity.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. It is worth noting though that releasing equity within your home isn’t always an easy process. Speaking with a Specialist Mortgage Advisor in Sunderland will definitely benefit you along the way. Our advisors have access to a unique and vast selection of second mortgage deals.

Rent Out a New Property (Buy to Let)

No matter if you’re a landlord with experience within the market already or someone who is looking into making their first purchase on an investment property, you’re going to need more than one mortgage to achieve your goals.

Buy to let landlords that have amassed themselves a suitably large portfolio will likely be used to the process of getting more than one mortgage. For those starting out as a landlord, sometimes you need help getting everything sorted properly.

Second mortgages in the form of buy to let work in a similar way to the first mortgage you took out. You still have to meet the mortgage criteria and put down a deposit (typically 15%-25% of the property), as well as passing affordability checks.

Affordability in this case isn’t always down to your own income though, as some lenders will look into what the predicted rental income will be expected and stress test this against their own multiples.

No doubt the cost of your mortgage payments should be sufficiently covered once you have found tenants and they have moved in. Initially though this might prove challenging, so you need to be able to cover the costs until the income starts to flow.

For buy to let mortgage advice in Sunderland, please feel free to speak with our buy to let mortgage experts here at Sunderlandmoneyman.

Rent Out an Existing Home to Purchase a New One (Let to Buy)

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 themselves into a bigger family home.

Our expert buy to let mortgage advisors in Sunderland also 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.

Purchase a Home For Your Children/Family Members

If you have any children or other family members that are having some difficulty in getting themselves onto the property ladder, you may have the option to take out a mortgage in your name and allow them move into the 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.

Are you named on an existing mortgage and want to buy a new home?

As noted in this article, there are various reasons as to 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.

We regularly find through our work as a Mortgage Broker in Sunderland, that one of the most common reasons for someone taking out a second mortgage is divorce or separation.

The difficult part here is that it can be hard to remove your own or your ex-partner’s name from the mortgage you share. This is once again down to affordability, but also down to both parties having to mutually agree.

Though it may come with challenges, it is not entirely impossible to obtain a mortgage post-divorce or separation. If you are in a similar situation, there may be some mortgage lenders out there who will give a bit of leeway considering your current personal situation.

If you’re named on an existing mortgage for a home you no longer live in, you should look to get your name removed as soon as possible. Having financial ties to someone can sometimes bring your overall credit score down, especially if the other person is bad at managing their finances and getting into arrears regularly.

Date Last Edited: 13/01/2023