Re-mortgage to buy a second home for son

Status
Not open for further replies.
L

Lorraine76

Registered User
Messages
6
Hi all. I can't seem to find much information on line about this, but we are a couple in our early 40's. Mortgage paid off. Would like to buy another house to give to our son. My question is can we re-mortgage our primary home to fund this to avail of the lower interest rates.
 
I'm a bit puzzled at the question.

You could remortgage your house to buy a Maserati if you wanted to.

A lender has two questions to answer before they will lend you money

Can you afford the repayments?
Do they have security?
 
I'm not suggesting that it's a good idea to remortgage to buy a Maserati, @Gordon Gekko ! :)

Though in the past there were more than a few home improvements with an engine and four wheels!
 
Thirsty said:
I'm a bit puzzled at the question.

You could remortgage your house to buy a Maserati if you wanted to.

A lender has two questions to answer before they will lend you money

Can you afford the repayments?
Do they have security?
Click to expand...
Are you aware of a lender currently offering such a facility?
 
@RedOnion - See my reply above.

My point, if rather facetiously made, it is perfectly possible to mortgage a property to purchase another one. I know of several who have done so. I'm not sure what's different about the OPs case?
 
Maybe a nice merc but not a like Maserati Seriously, asked my bank about this and were told that I would need a buy to let mortgage. That for remortgage I would need to prove that the money was spent on the primary residence for upgrading etc. Maybe I should change banks!
 
"an equity release" = borrowing money whilst offering your home as security?

Mortgage Top Up - Home Improvement Loan | permanent tsb

Get a Home Improvement Loan at our great mortgage rates. Get started on your home improvements today! Book an appointment or call us on 1890 500 156
www.permanenttsb.ie www.permanenttsb.ie

Key Features | Home Improvement Loan | Bank of Ireland

View what Bank of Ireland offers with our Home Improvement Loan, competitive rates and good understanding of your needs. - Bank of Ireland
personalbanking.bankofireland.com personalbanking.bankofireland.com

Key questions lender will ask: can you afford the repayment, do they have security. I'm sure there's a host of other paperwork, but I think they'd be important dont' you?
 
Lorraine76 said:
Maybe I should change banks!
Click to expand...
No. The above posts are very misleading.

What you want to do was possible up to 2008. Since then equity release has obviously tightened up a lot. Banks will provide equity release for very specific purposes, such as home improvements or paying college fees for your children. For any material amount they will seek evidence of the spend. Buying a 2nd home, holiday home, or an investment property is not a purpose that banks will provide an equity release. (By the way, they won't provide it to buy a Maserati either, not in the last 12 years anyhow).

Your only options are either a mortgage for your son (I'm assuming that's not a runner), or a BTL mortgage, secured against the new property. You will need 30% deposit.
 
It does rather depend on how much you need to borrow.

Whilst I'm sure RedOnions reply is correct; it is possible to borrow on a home improvement loan, but most lenders have a limit and that might be too low for what you want.

The BTL rates are higher, but your son can earn 14k a year tax free under the rent-a-room and that might help him get sufficient deposit within say 5 years to buy you out.

That would be the route I'd go anyway.
 
RedOnion said:
No. The above posts are very misleading.

What you want to do was possible up to 2008. Since then equity release has obviously tightened up a lot. Banks will provide equity release for very specific purposes, such as home improvements or paying college fees for your children. For any material amount they will seek evidence of the spend. Buying a 2nd home, holiday home, or an investment property is not a purpose that banks will provide an equity release. (By the way, they won't provide it to buy a Maserati either, not in the last 12 years anyhow).

Your only options are either a mortgage for your son (I'm assuming that's not a runner), or a BTL mortgage, secured against the new property. You will need 30% deposit.
Click to expand...
Thank you, thats exactly as I thought. I was just holding on to some hope that one of the banks did it. Looks like buy to let is our only option. Thank you
 
Banks don’t do equity release.

They do home improvement loans and look for evidence above pretty low levels (e.g. €50k).
 
Thirsty said:
@RedOnion , not following, are you saying that banks aren't doing Home improvement loans?
Click to expand...
Of course they are. But a home improvement loan is even more expensive than a BTL mortgage, and there's a limit to the amount you can borrow.

I'm assuming you are talking about an equity release for a home improvement? Some banks also offer those as a top-up to an existing mortgage. But there's a limit before the bank starts looking for evidence of the spend, planning permission details, and staged drawdown signoff from an engineer.

Saying you can get an equity release to buy a Maserati is a steaming pile of BS!
 
Of course they are. But a home improvement loan is even more expensive than a BTL mortgage, and there's a limit to the amount you can borrow.
Click to expand...
Looking directly at interest rates the BTL rate is significantly higher. Yes there is a limit, I believe that was referenced earlier - we don' t know how much the OP wants to borrow. The specific question was if they could borrow using their own home as security.

As I believe I have already said, I was being some what facetious in my reference to a Maserati.
 
Status
Not open for further replies.
Back
Top