Andrew Montlake, brand, marketing and communications director at broker Coreco, says: "A second mortgage can work very well for those who have good incomes and are looking to buy a property for a dependent relative. Borrowers are also using this to help their children to get on the property ladder with a joint mortgage. "He adds: "I recently arranged a loan for a client who was a partner in an accountancy firm and wanted to buy a property for his parents to live in. Given their age, this was proving difficult for them to do themselves. As affordability was not an issue for him, it was a good option for everyone. And as the son owns the property from the outset, there are no inheritance tax issues in the future".
A second mortgage works very much the same as any other standard regulated residential mortgage would, and most lenders will offer those looking for a loan for a second home their standard product range to choose from, with the same interest rates and fees. However, they may cap their loan-to-value (LTV), or have some extra-strict affordability criteria. Your lender may also require you to declare if your family member will live in the house and ask them to sign an occupier's consent form. If you might want to consider how to manage a second residential mortgage Enables IFA’s can talk you through your options.
Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE
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