I would like to buy a second property to renovate and sell but which mortgage is the best for me?

Posted on 8 October 2007

I own outright the property I live in (no mortgage) I would like to buy a smaller property to renovate and sell on, which mortgage is the best for me?

Susan

Hi Susan,

You can mortgage either property. If you have a cash deposit you can mortgage the new smaller one, but if you don't, then it will be easiest to mortgage your current one, so you are only borrowing a small percentage of that property's value, so will get a better deal.

In terms of features you would need a mortgage with no Early Repayment Charges so that you can repay the debt when you have renovated and sold the property on.  I would also go so far as to say: why not take an offset?  This means that you have the cash to do the house up, then when you sell the property off, you pay the money back in (so the debt is back down to £0 and you can pay nothing monthly)  then if you fancy taking on a second property, just take the money out of the account and go again?

It sounds like you're in a good position to turn this into a super project, good luck.

Katie.

Category: Offset mortgages, Remortgaging, Second properties

 

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