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How crazy is it to remortgage a paid for house?

(10 Posts)
MrsWhirling Tue 30-Jun-15 20:14:39

Just that really. I live in a house with a mortgage with DH and DC's. I also own outright the house my parents live in. I would like to buy in the catchment are for a school but have no deposit and DH doesn't want to sell our house. I have been advised to consider borrowing the money for a new home against my paid for house. Does this sound entirely stupid/reckless? I have looked at some mortgages and I would need £2000 per month for the combined debts which is fine but I'm worried it's too tidky. Has anyone done anything similar?

holeinmyheart Wed 01-Jul-15 18:26:53

I don't think it is crazy providing that you have some savings in case the tenants decamp. You also need to factor in insurance. The insurer needs to be told that you will not be living in the house.

The mortgage rates are very low at the moment but in the past they have risen to 15% so there are calculated risks. However if no one every took a risk no property will get sold.

My family and I, have all re mortgaged and bought other houses. You could maybe find a provider that will give you an interest only loan.
A lender will lend you only so much relating to the L to V.

If it all goes well you could find yourself the owner of two houses as a Mortgage is one of the cheapest loans you can get.
Best of luck.

MrsWhirling Wed 01-Jul-15 20:39:24

Thanks Holeintheheart that is really sound advice. I saw a financial advisor today who also suggested interest only. I need to trust my gut intinct and just bloody do this! Xx

holeinmyheart Wed 01-Jul-15 21:15:24

Now is an excellent time to buy a house and you should just follow one or two rules if you can get a mortgage.
Don't set your heart on one house.
Bargain to the nth degree.
Have a survey and pay attention to the boiler and roof and electrics. Or take a builder around, he will be cheaper.
When you are going around a house don't say anything to the sellers to indicate enthusiasm about buying it.
Get at least three quotes from Solicitors regarding fees. That can save you a few hundred pounds.
Check flooding risks over the Internet, using a local paper.
Speak to the neighbours in case there are the 'neighbours from hell' about.
Go and have a look at the area at night.

morethanpotatoprints Wed 01-Jul-15 21:19:45

We have done similar but on a much smaller scale and tiny mortgage.
We own one outright which we rent out and have a small mortgage on our previously paid for home.
You need to factor in interest rate rises and loss of income, perhaps if you can save x amount of months mortgage to keep in front.

MrsWhirling Thu 02-Jul-15 08:18:50

Our borrowing would be significant. We would look to release 200k from our paid house and then borrowing another 200k, hopefully with interest only mortgage. Ideally we would like to buy in the catchment area of a particular school, unfortunetly properties there are still out of our price range.

whooshbangprettycolours Thu 02-Jul-15 19:52:23

How will you pay the mortgage off if it's interest only.... they are quite difficult to get these days too

MrsWhirling Thu 02-Jul-15 21:12:22

Well I was hoping to only have interest only for the first 2-3yrs and then switch to repayment.

whooshbangprettycolours Sat 04-Jul-15 16:08:31

I'd speak to a broker and see if that sort of deal even exists

MrsWhirling Sat 04-Jul-15 19:14:39

Yes, have an appointment on Tuesday x

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