Mortgage quandary

[Blackberry]

client has an interesting question, would anyone know the answer?

He has an existing mortgage of approx £67k on a very good rate with his bank.

He is buying a new house with a value of approx £290k and needs and additional mortgage of £123k.

Bank had previously offered for this but on receipt of the application they had changed rates! and it was going to be quite a bit more expensive.

he now wants to keep existing mortgage with the bank (£67k) due to the rate. and get the additional mortgage (£123k) through another lender. total borrowing would be £190k

my question is: is this possible and if so how do you go about it? and how for example is security hed on the property?

[Gillie]

I take it you mean he wants two mortgages for one property? So one therefore will become a second charge on the property ... or have I misunderstood your question?

[Mattonella Tile Studio]

I wouldn't be surprised if the second lender who had second charge, would load the interest rate anyway, if they even agreed, to reflect the fact they haven't got first charge.

[Gillie]

I wouldn't be surprised if the second lender who had second charge, would load the interest rate anyway, if they even agreed, to reflect the fact they haven't got first charge.

Quite agree with you, which would therefore negate the whole aspect of it ...

Blackberry, has your client spoken to an IFA about this?

[TMSL]

I am a mortgage broker. It would be a second charge loan and it would negate the benefit once you factor in the standard second charge interest rates of 10% and high fees. Second charge loans are designed for borrowing whilst you are tied into a fixed rate in order to avoid a remortgage.

It is worth contacting a whole of market broker to see whats out there (of course I would say that I am a whole of market broker:))

[Blackberry]

cheers

thought this would be the case

[OldWelshGuy]

If your client is creditworthy, then he/she will find an overall package that will work. If OTOH he/she has unrealiistic views, it simply isn't going to happen. Some people want the penny and the bun, as the non nationwide guy says 'it doesn't work like that ' :D