Using equity in existing home to buy another.

[croyde]

We have approx about £380,000 equity in our current home. If I were to buy another property, for me to live in, borrowing against this, would the mortgage provider still base the amount allowed against your earnings?

Would be looking at 200,000 max.

Cheers.

Edited by croyde on Tuesday 1st September 18:17

[scotal]

croyde said:

We have approx about £380,000 equity in our current home. If I were to buy another property, for me to live in, borrowing against this, would the mortgage provider still base the amount allowed against your earnings?

Would be looking at 200,000 max.

Cheers.

Edited by croyde on Tuesday 1st September 18:17

Perfectly possible, and easily done, assuming your income covers the new mortgage amount. (i.e current borrowing + the equity released)

There will be LTV limits on raisng capital even to purchase a 2nd home, in your current circumstances.

If there are 2 people on the mortgage, you would both have to sign on the dotted line to release the cash.

If you are tied to your current mortgage provider by early repayment charges you will either have to swallow those ERC's or stick with their product range.

Give it 5 YHM.

[Welshbeef]

Done this many times I always do the equity release first and get the cash in the bank then go for the other mortgage that mortgage company will do a credit search and will see the mortgage you have and it's monthly costs this will be used in their affordability calculations.

I always end up moving out of the house we own and ask for permission to let fr my current bank this is not a bury to let mortgage and has fees of no more than £200 for admin and you keep the current rates so on my case the svr so many thousands of pounds saved in fees and vastly lower interest rates.
Note I have never had a mortgage broker/advisor/ifa advise to do this as clearly there is nothing in it for them my old man tipped me off on it a good 15 years ago and I have been doing this setup personally a lot the last decade and still have all those live mortgages only one is now a buy to let as it was bought specifically for letting from the off we never lived there.