Can I borrow more money to buy a second property?

Posted on 5 March 2008

Dear Katie,

I am buying my flat. I owe £29,000 roughly on the mortgage, but I also have debts of about £30,000. The flat will be mine in February 2009 and the endowment is stacking up to meet the commitment and a little more. My question is how can I keep the flat currently worth £300,000 and buy another property of say £160,000. I intend to carry on working. My salary is currently £30,000. Is this feasible? My partner will live in the flat and I want to live in the house. I am looking at a solution to clearing all my debts in earnest.

Thank you.

Hi Marie,

With an income of £30,000 you could probably have total personal mortgage and debts outstanding of £150,000.   This means that you can't really borrow more than £90,000 in addition to what you have outstanding currently.

If you really want to keep the old property, you will have to let it out so it is making a legitimate rent, and paying a mortgage for itself.  This will free up your income to buy another property.

Katie

Category: Second properties

 

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