Numpty mortgage questions.

[itchyfeetagain]

Husband and I own 2 properties. No mortgage atm.

We would like to sell one and raise a mortgage of about £100k on the second (worth about £250k)

Is that even possible.

House 2 (with the mortgage) would be rented. The other option is a holiday let.

Any insight or advice would be welcome 😊

Hmm so you are effectively talking about remortgaging/equity release on the second but you own it outright currently?

Oh and on 2 you’d need a buy to let mortgage if going down the mortgage route?

It’s definitely possible. Talk to a mortgage broker - London and Country are pretty helpful.

Yes it’s possible, it’s called an unencumbered equity release. If you are renting it out you will need a buy to let mortgage so there may well be fees to set that up as well as solicitors fees to set up the charge the mortgage lender will hold over the property.

It will also depend on what the funds raised are for as some lenders are quite specific in their policies about the purpose of the funds.

You’ll need about 33% deposit for a holiday let. Not many mortgage providers are offering them at the moment. They are VERY strict on lending criteria (I’d call it ‘twitchy’) so I’d advise you to join Experian and make sure your finances are tip top before you apply.

Thank you. I feel a little embarrassed asking this in the middle of a pandemic when people are struggling. We are very fortunate on one hand, but in this position due to bereavement and sadness

So a mortgage broker would be a good place to start?

Yes, but perhaps decide if you want a buy to let or a holiday let.

@CountessFrog

Yes, but perhaps decide if you want a buy to let or a holiday let.

The income from a holiday let would be about 3x the income which is tempting to pay off the mortgage but otherwise I'm not fussed

The holiday let will have much higher overheads though. Lots to consider. I’m in the process, feel free to PM me