Buying For University Accommodation

Posted on 2 October 2011 by Trevor

My wife and I own a second home which is mortgage free, as is our main residence.  We would like to buy a house for our son while he is at uni. Can we borrow the full amount using the equity on the second house?  House worth £260,000, house to buy £170,000 ish.


Depending on your annual income and credit record, it should certainly be possible to raise the money you require.  Whether you do this on your second property, main residence or son's property will come down how each property is used, the choice of lenders and what products they have to offer you.

If you are thinking of raising the funds on your second property, lenders will waqnt to know who lives in the property and how often.  If it is let then the rates and fees you will have to pay will be higher, but you may be able to offset these against rental income when it comes to calculating you tax liability.  If the property is not let and only occupied at weekends or holidays then your choice of lenders may be restricted.  Experience has shown that people look after the roof above their heads and any second homes are likely to be neglected if they fall upon hard times.  For this reason you may find the best rates and terms available if you raise the money on your main residence.

Finally, you could raise the money on the new property and how you did this would depend on whether you son was going to pay you rent and if the property was to be brought in his name or yours.  Each has it's own pro's and con's and I recommend that you take independent legal as well as mortgage advice.

I believe we can help you and that you would benefit from speaking to one of our independent mortgage advisers.  Please call 0344 346 3672 and tell the consultant the date and title of your question, they will then be able to advise you on your situation.


Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.

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