Another Mortgage Question

[Jeannie D]

Hypothetical question, but I would be grateful for any advice.

If a homeowner, with no mortgage or debts, wanted to buy a second home in France, could the money be raised by mortgaging the UK home? LTV would be approximately 25%. I realise that in these very specific circumstances, it would be advisable to consult a mortgage broker, but I really just want to know at this stage whether it is actually feasible, i.e. whether it is something that mainstream UK mortgage lenders would be willing to do. If it is, would it be classed as a new mortgage or a re-mortgage?

[ComareTheMortgageMarket]

It would be possible yes & would be classed as a remortgage even though the present property is unencumbered. The general rules for raising money against your house is that banks will not allow it for gambling or business purposes.

[IFA]

Yes Jeannie, that is entirely possible subject to the usual checks being made by the lender.

This would be considered a re-mortgage as you are not purchasing a property, and in some cases the lender may even pay for the legal fees and survey costs involved in setting up the loan and releasing the equity to you.

As Anthony has stated, lender's are not too concerned about the purpose of the borrowing so long as it isn't illegal, for commercial usage or for gambling with. Investing in property (even overseas) is a perfectly legitimate use of released equity.

[Jeannie D]

Thank you, both, for your very quick and very encouraging responses. A bit more planning, a few phone calls, and it might be possible to combine a holiday with some serious shopping....

By the way, IFA, your other posts today have made me laugh out loud but please stop encouraging them! Irony does not always survive an Atlantic crossing.

[IFA]

That's some shopping trip! Why not be like other girls and just go to New York for a handbag?

Glad I made you laugh but you're probably right about the unintentional encouragement. Still, any replies that come back will probably be even funnier.