If you meet the lenders criteria, including an affordability assessment and credit check, it is possible to get a second mortgage.

Why would I want a second mortgage?

  • Raise additional funds.
  • Buy to Let mortgage, where you purchase a new home with the intention to rent it out.
  • Let to Buy mortgage, where you rent out your existing home to purchase a new one.
  • Second home mortgages.
  • Named on an existing mortgage and want to purchase a new home.

Raise Additional Funds

After 5 years into your mortgage term, you’ve likely built up some equity in your home. You can withdraw some of this equity into a lump sum of cash.

This process is known as a further advance mortgage. It involves borrowing additional funds from your current lender, often for purposes like home improvements or obtaining a second mortgage.

It’s up to you what you do with the money that you’ve raised through the equity in your home. Whether you want to use it for another mortgage deposit or for something else is completely up to you.

The amount that you can borrow will depend on the amount of equity in your property. You will need to demonstrate to your lender that you can afford both mortgages. Our mortgage advisors in Birmingham can access competitive deals and options through our large panel of lenders.

Buy to Let Mortgages

Experienced landlords with large portfolios are familiar with obtaining multiple mortgages. However, if you’re just starting out or own only a few properties, speaking with a qualified mortgage advisor in Birmingham can be highly beneficial.

Second mortgages for buy to let properties operate similarly to your current mortgage. You’ll need to qualify for the loan, put down a deposit (usually 15%-25% of the property’s value), and evidence your ability to manage payments on both mortgages.

Of course, your mortgage payments should be covered once you find tenants to live inside the property, however, you may not let your property straight away so you need to be able to manage the payments even if the property is not let.

Let to Buy Mortgages

Let to Buy is where you remortgage your current home onto a buy to let mortgage in Birmingham and purchase a new property to live in on a standard mortgage. Depending on the equity you have built up, you can choose to release this as a means of a deposit for your onward purchase.

In some circumstances, landlords will build their portfolio this way when they want to move into a bigger home themselves without selling their existing property.

Second Home Mortgages

You may want to get a second mortgage if you would like to purchase a second home. Usually, this can be for a family get away, where you are not going to let it out. Or it could be that you need a second dwelling for weekdays at work closer to the office.

Ties to an Existing Mortgage

Sometimes another reason we see people being listed on two mortgages is because of a recent divorce and separation.

Unfortunately, it can be hard to remove your own or your ex-partner’s name from a mortgage because both parties have to agree that it’s okay to do so and prove that they will be financially able to afford a mortgage on their own.

Alternatively, if you’re named on an existing mortgage in a home that you’re not living in, it may be best to try and get yourself removed if you can. Being financially linked to someone can sometimes bring your overall credit score down, especially if the other party has bad credit.

Date Last Edited: September 2, 2024