For individuals who are looking to invest their savings into another property, you may be wondering if you are able to take out a second mortgage. The subject of mortgages is one that many people find quite overwhelming to research, so to help you out, today we’re going to share with you the answers to some of the most commonly asked questions a mortgage advisor in Preston usually receives. Keep reading as we discover how many mortgages you can have and the things to keep in mind when taking out another mortgage.
Can You Have Two Mortgages?
After purchasing your first home, you might be wondering if you are able to invest in a second property for either personal use or to rent out. As long as you can show a mortgage lender that you can afford the repayments on the next mortgage and that you are in a good financial situation to take out another mortgage, you shouldn’t have any issues securing a second mortgage. This is an option that people use for holiday homes, a second family home, or a buy-to-let property. There are many reasons why someone may want to take out two mortgages, and it’s a very common situation today. Remember, every lender has different criteria, so even if you are rejected from one lender, don’t let this put you off trying to secure another mortgage. Make sure you shop around with mortgage advisors in Preston to ensure you are getting the best deal for your mortgages.
How Many Mortgages Can I Have?
Many mortgage providers will allow you to have multiple mortgages, but there are certain things to keep in mind when considering taking out multiple mortgages. Some lenders don’t allow you to take out a second or third mortgage with them, and some may restrict the amount you are allowed to borrow. It will all depend on who you choose to work with and potentially where you are based. However, there’s nearly always someone out there willing to do business with you and help you secure multiple mortgages.
The main thing they’ll be looking at is your current financial status and whether you can truly afford to take out another mortgage. You’ll find that they will take the time to look at your current portfolio of properties and decide whether adding another property to this is a realistic goal. There are so many things that people don’t tell you when buying a home, so make sure you do your research to avoid any issues or disappointment further down the line.
What Will Be Checked When I Apply for Another Mortgage?
Preparation is key when it comes to securing a second mortgage, and for that reason, you’ll want to ensure your finances and payments are all in a good place before attempting to start this process. If you aren’t sure about your credit score currently, you’ll want to ensure you are creditworthy. This will be checked by anyone who is looking to take out multiple mortgages, and you’ll need to pass this test in order to secure two mortgages. The risk and exposure will be checked by the company you are trying to secure a mortgage with, and this is sometimes completely out of your hands. The company may not be willing to offer a mortgage for another flat in a block of flats, and sadly, there’s little you can do at that point to change their mind.
When it comes to securing another mortgage, you need to be very careful about the type of mortgage you are looking into. Sometimes, people buy properties to rent out with a residential mortgage, which is illegal when done knowingly. The deposits and interest rates are very different with residential and buy-to-let mortgages, but people often try to find a way around these issues. Keep this in mind when you are saving up for a deposit for your next property, as you’ll need to ensure you have the right amount for the type of property you are looking to secure. Mortgage lenders are becoming much stricter on this type of lending now due to so many issues in the past, so make sure you research the type of mortgage you need before even sitting down for an initial consultation with a mortgage advisor.
Buying a second property is certainly an exciting consideration for individuals, but you’ll want to ensure you are in a good financial position to make this investment. Lenders are very wary about offering second mortgages without a good credit score, so keep this in mind well in advance of your purchase. For more information about eligibility for a second mortgage or how many mortgages you are able to take out, contact our team today. We’ll be happy to discuss any concerns you may have and help you to secure your next property.