borrowing against equity in house

(4 Posts)
Nyancat Thu 05-Jun-14 09:14:43

not sure if this is the right place but if anyone has any knowledge about this I'd appreciate it.
dh and I currently have two houses. 1st was his before we got married and in serious negative equity, currently rented out, interest only mortgage.

I had sold my first house at height of market and last year we used the funds from that to buy our current home.

I don't really enjoy being a Ll and it's just about covering costs renting so would like to sell. does anyone know if you can borrow against equity in current home to pay off shortfall between any purchase price and mortgage amount in old house if we sell. if we were applying to bank to extend borrowing on 2nd house do we saw it's for home improvements or tell them the actual purpose?

thanks!

bberry Thu 05-Jun-14 09:17:04

You need to look at your salaries and the maximum further advance your current lender would offer you when the second property is gone... If the figures all work out I would just be honest....

You would definitely have to tell them the reason. Whether they would choose to lend you the money would depend on your ability to repay it and your current LTV ratio I imagine.

Nyancat Thu 05-Jun-14 18:52:27

thanks, we'd worked out we would be fine with the extra payments and ltv, I'm really wondering about whether they would lend to pay off the shortfall from selling the old house? or would we be better to just say home improvements. it's one of those situations that once you ask, if they say no are they likely to just decline if we then say we'd use it for home improvements iyswim

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