Second Mortgage Strain

Posted on 4 October 2010 by Geraldine

Our house sale fell through 2 years ago after we had committed to buy the present house we are in. The financial strain of paying for 2 mortgages is really taking its toll and I was wondering if we would be able to re-mortgage the house we no longer live in to lower our mortgage payments until we can sell? We were previously advised this would not be possible as it is not our main residence. The mortgage is currently with Northern Rock and is on their SVR as we are not tied into a deal with them, there is about approx 20K of equity in the house.


I quite understand the strain of supporting two mortgages is becoming unbearable, but I am not sure how you have found yourself in this position? When you purchased your new house was the new lender aware the old mortgage wouldn't be repaid and were Northern Rock aware that you would no longer be living in the existing property?

As you have not mentioned who is living in the existing property, I assume that it is empty and has not been let. In this situation you are going to have great difficulty remortgaging at all, yet alone finding a rate lower than 4.79%. The reason for this is the greater risk from vandalism, burst pipes and other damage that an empty property is prone to.

If however, someone lives in the property at weekends or during the week this changes the situation completely and there are a few Lenders who will consider this subject to your income covering both mortgage debts.

Depending on the value of the property and the size of your mortgage, the other alternative is to let the property. You can either ask Northern Rock for permission to let or remortgage to a Buy to Let mortgage. Whilst you would probably end up with a higher interest rate on the mortgage, you would have the rental income to help cover the mortgage payments and this could help relieve the burden on your finances.

I recommend that you speak to an independent mortgage broker who can gather the full details of your current circumstances and make an assessment of the best way for you to proceed.


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.

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