Next Time Buyer & Second Time Buyer

What is a second time buyer mortgage?

From the point of view of a lender, anybody who previous owned, or has a mortgage on a home currently, who also is looking to acquire property is classed as a second-time buyer. Here at Mortgage Lolly, we have been working with clients who wish to buy second properties for well over two decades now, and we are familiar with the particular schemes and financial vehicles which are available to second time buyers, as well as the requirements and stipulation of lenders.

Talk to us now to and receive fee free advice.

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DIFFERENCES FOR SECOND TIME BUYER MORTGAGES?

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Whilst in many ways the requirements for Second Time Buyers with respect to lending criteria are similar to a regular residential first time mortgage. Deposit criteria are similar, but most lenders will ask for 10% minimum deposit – larger deposits will reduce risk in the lenders eyes, and increase the likelihood of more favorable interest rates. If you have previously owned a home but do not any longer, or currently have a mortgage you may be classed as a second-time buyer by a lender if you’re in the market for property. Some lenders may view people who haven’t had a mortgage for three years or more as first time buyers.

To find out how a lender might view your own circumstances, talk to an expert at Mortgage Lolly.

WHAT ARE THE OPTIONS?

We would advise you get in touch with Mortgage Lolly, to get free expert advice and a no-obligation first quote, but in the meantime, here are some options to consider that may make lenders look more favourably on your application for a mortgage on a second home.

Port your current mortgage

if you’re happy with current mortgage terms, you may be able to port it to purchase your next property. This allows you to apply the current mortgage to your new home, and may mean retaining your current interest rate. Lenders will however want to review your current financial circumstances before agreeing, in many cases this is treated as a brand new mortgage application. It is usually only possible to port fixed rate mortgages. If successful – fees will usually apply.

Remortgage your current property to release equity

If there is enough equity in your current home, and you want to keep the original property, then you could consider remortgaging to release equity to provide funds for a deposit on your new mortgage. Whether you’re maintaining mortgages for two properties or are increasing the sum you borrow against your mortgage, the majority lenders will need to satisfy themselves that you can afford the higher payments from your income alone.

Legal Notice: Equity release will reduce the value of your estate and can affect your eligibility for means tested benefits.

Let-to-buy Mortgage

If you want to buy a new property and keep your current property to rent out, a let-to-buy mortgage (not to be confused with a buy-to-let) might be a good route for you in a number of circumstances such as.

You’re in a hurry to move – and don’t want to wait to sell,
You’ve struggled with selling your home
You’re buying a new home with a partner, but want to retain ownership of your existing property.
You’re moving elsewhere for a few years, but will return to your home in the future.
In this case, you rent out your existing property, and then take out a new residential mortgage on your new property.

This can be an excellent solution, however let-to-buy mortgages are complex vehicles and there are many factors to consider including switching your mortgage to allow letting, or obtaining consent to let from your mortgage lender, financial reassessment from your lender, borrowing limits of 75-80% on your current home, proof that the let will cover over 100% of your current mortgage payments, (usually 145%) and many other potential obstacles.

We strongly advise you contact us to obtain more information on this type of product so that we can guide you through the process. Contact us today for fee-free advice.

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Next Time Buyer