New Mortgage - Will current mortgage with other lender be cleared?

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apple1

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Hi,
I currently have a mortgage with one lender for a PPR in Northern ireland but am looking at taking out a 2nd mortgage with a different lender for a property in the republic. Presuming the 2nd mortgage is approved, does the lending institution typically loan enough money to clear the existing mortgage and thus loan enough for the combined borrowings? May not be well phrased, but I hope other posters know what I mean?? Thanks, apple1
 
If you are selling the NI property then the mortgage will be repaid from the sale proceeds. If not (and in answer to your question anyway) - no; a lender in the Republic will not lend based on the combined securities of both properties. As you are not a first time buyers the maximum you can borrow is 95% of the purchase price/valuation of the house in the Republic (subject to criteria).

Sarah

www.rea.ie
 
Thanks Sarah. I don't intend selling so was just wondering if the second institution would lend a combined amount allowing me to pay off the first mortgage.
 
Could you post the figures please - value of each property, outstanding mortgage in NI (€ equilavent) and the mortgage required to buy the house in the Republic.

Sarah

www.rea.ie
 
Hi Sarah,

Outstanding mortgage on NI property = €138,000. Value of property = £220,000 (€330,000). Looking for a mortgage of €300,000 for a self-build property to be valued @ €450,000.
 
Thanks. Based on the figures there would not be enough equity in the new house (once finished and valued at €450,000) to sustain a total debt of €438,000 - the loan to value would be 97.3% against an absolute maximum of 95% (Bank of Scotland - the others stop at 90% on a remortgage). Will you be letting the house in NI? If so you will be able to offset the interest payments - and other expenses - against the rental income to reduce your tax liability.

Sarah

www.rea.ie
 
Hi Sarah.

I've two options. Either sell in NI within 12 months of moving into new PPR or rent. Current rentals in the area make approx. £450/month.
 
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