Posted on 26 May 2012 by beryl
We have a property worth about £170,000. We want to buy a property which is a mobile home with land and planning permission for a bungalow for £275,000. Could we use our house to secure a mortgage for the new property?
Depending on your income, employment status, credit rating and your property being suitable for mortgage purposes it should be possible to raise at least some of the money you require against your existing home. It is likely the amount you can raise will be restricted and I would work on borrowing up to 75% of it's current value, around £127,500.
With regards to the new property it is likely you will not be able to get a standard residential mortgage until the mobile home has been demolished and the bungalow built. You may be able to get a self build mortgage or short term development finance, but it depends on what your plans are and the final value of the property once all the work has been completed.
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. Amongst other things, they will want to know who will be living in the new property, what you intend to do with your existing property.
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.