Merging mortgages?

shelly6

My current situation is that myself and OH are living in a small house, in an area we don't like. The mortgage is just in my name and I have it 3 years, and I bought before we got married.

We want to move.
Anyone know if it would be possible to get one mortgage to cover two houses?
Seeing as I've already paid 3 years of this mortgage (mostly interest, I know:( )
would we still need the 10% deposit? The plan would be to rent this house, and on the current rental market, that would more than cover the monthly mortgage repayments, so that would be a bit of extra income.

MagicMarker

Have I been transported back in time? Is it 2007 again?

You have a mortgage that's only 3 years old, meaning you bought when prices were near their highest, meaning you're probably in negative equity by quite a margin. And now you want a 2nd 100% mortgage for a new house, while you rent your other house.

Sorry to state the obvious, but if you can rent you current house and cover the mortgage and even make a little profit, then why don't you just move out and rent somewhere else yourself, instead of taking on even more debt?

Gingernuts31

shelly6 wrote: »

My current situation is that myself and OH are living in a small house, in an area we don't like. The mortgage is just in my name and I have it 3 years, and I bought before we got married.

We want to move.
Anyone know if it would be possible to get one mortgage to cover two houses?
Seeing as I've already paid 3 years of this mortgage (mostly interest, I know:( )
would we still need the 10% deposit? The plan would be to rent this house, and on the current rental market, that would more than cover the monthly mortgage repayments, so that would be a bit of extra income.

Not sure about the deposit, only your bank could tell you this for sure I guess. If you thinking of renting out your current home check this page out www dot lawyer dot ie/property/renting-out-a-property. It'd be a nasty shock if you didn't do it lawfully if your caught.

Gurgle

shelly6 wrote: »

The plan would be to rent this house, and on the current rental market, that would more than cover the monthly mortgage repayments, so that would be a bit of extra income.

I expect you'd have to get the current loan re-issued as a business loan and take out a new mortgage for your residential house.

You'll need a deposit too of course, I don't think any lender is doing 100% mortgages anymore.

Do you really think you'll be able to rent the current house in an area you "don't like" for enough to pay income tax and still cover the mortgage?

That would be quite unusual these days.

shelly6

Yep, definitely could cover it and then some with rent. My friend is looking to rent in the area and is finding it very difficult. She is looking at one bed apartments in my estate, and the rent is a little more than my repayments. We have a three bed house. She has gone to view two places in this estate, never mind the surrounding area, and has not gotten them because other people have taken them.

Some of you seem to be forgetting that the recession has been going on for a lot longer than three years. The price of the house was no where near what it would have been valued in peak times. It's value has gone down a bit, but not much fortunately.

I'm not looking for a 100% mortgage, more of a way around using actual cash as the deposit! (As in value of house A is 100k, house B is 100k, so 100% mortgage is 200k, however I have already paid 20K towards house A)

shelly6

And it's not a bad area, just not very convenient since I moved jobs last year.

Stheno

Have you factored in the tax you will have to pay on your rental income?

shelly6

Stheno wrote: »

Have you factored in the tax you will have to pay on your rental income?

Vaguely. I know I'd have to pay, but I don't know the ins and outs. I'm assuming that it is taxed as an additional income on top of my wages? It's not completely separate or anything is it?

It's an idea that I have, to see if i could get moving faster. Otherwise we will be saving a deposit and sitting tight for a while.

shelly6

Gingernuts31 wrote: »

Not sure about the deposit, only your bank could tell you this for sure I guess. If you thinking of renting out your current home check this page out www dot lawyer dot ie/property/renting-out-a-property. It'd be a nasty shock if you didn't do it lawfully if your caught.

Would definitely be doing it lawfully! I certainly don't want to get caught out.

Gurgle

shelly6 wrote: »

I'm not looking for a 100% mortgage, more of a way around using actual cash as the deposit! (As in value of house A is 100k, house B is 100k, so 100% mortgage is 200k, however I have already paid 20K towards house A)

Ah, with you now.
I think what you're looking for is equity release on the current house to cover the deposit on another. As you'll have to get a new loan for the original, there's nothing to stop you applying* for more than you owe so long as you don't exceed the bank's lending margin.

e.g. if you currently owe 70% of the value, you could potentially take out a new business mortgage for 80% and use the extra 10% towards a deposit.

*Applying is one thing, getting it approved is another. I think 'equity release' may be considered bad language these days.

shelly6

Gurgle wrote: »

Ah, with you now.
I think what you're looking for is equity release on the current house to cover the deposit on another. As you'll have to get a new loan for the original, there's nothing to stop you applying* for more than you owe so long as you don't exceed the bank's lending margin.

e.g. if you currently owe 70% of the value, you could potentially take out a new business mortgage for 80% and use the extra 10% towards a deposit.

*Applying is one thing, getting it approved is another. I think 'equity release' may be considered bad language these days.

Thanks! I imagine it probably is filthy language these days!