Can we raise the purchase price of a renovation project against our main residence?
Posted on 11 April 2013 by Kevin
We own our property outright and it's approx. value is £220,000. We are considering buying a 2nd property as an investment to do up and sell on, rather than as a buy-to-let. The approx. value of the 2nd property will be £120,000 and we wondered if it would be possible to borrow the full amount against our main property using an interest-only mortgage as I understand that many lenders are no longer offering interest-only deals.? Our joint annual income is in the region of £58K. Thanks.
Whilst it's true that many lenders aren't offering interest only, many still are. Quite a few lenders cap their interest only offerings at 50% LTV and also require a minimum equity level of £150,000. In theory there's no reason why you can't raise the full purchase price on your existing property, subject to meeting the usual standard lender criteria.
However, there are still lenders who will look at the levels of borrowing on interest only that you are seeking. These will tend to be the smaller lenders who look at each case individually rather the major high street ones.
If you'd like to discuss your enquiry in more detail, then please let me know, and I'll arrange a convenient time for one of our consultants to contact you.
More than mortgages, talk to me about: Financial Protection | Investments | Personal and Corporate Pensions | Home Insurance General Insurance | Valuations | Conveyancing | Wills | Home finders
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.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY DEBT SECURED ON IT.
John Charcol is a trading name of John Charcol Limited and its Appointed Representatives. John Charcol Limited is authorised and regulated by the Financial Conduct Authority. The Financial Services Register number is 665649. Registered in England No. 9157892. Registered office address for John Charcol Limited is 5th Floor, Cutlers Exchange, 123 Houndsditch, London, EC3A 7BU. The FCA does not regulate some investment mortgage contracts. Calls may be recorded for training and monitoring.