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How to Get Another Mortgage If You Have One Already

Looking to take out a new mortgage but already have an existing one? Our guide has you covered.

No impact on credit score

Pete Mugleston

Author: Pete Mugleston - Mortgage Advisor, MD

Updated: August 25, 2021

Whether you want a second mortgage to buy another owner-occupied property, finance a major investment, or invest in real estate, there are plenty of good options available.

But before you can take that leap and apply for your second mortgage, you’ll need to know the factors that determine whether you qualify for another loan.

Can I get another mortgage if I already have one?

Yes, you can get another mortgage if you already have one, and there are plenty of lenders who can offer great deals on any second mortgage you wish to take out.

Like your first mortgage, your additional/second mortgage is a loan that’s secured against your home. The property, therefore, acts as security to the lender that you’ll pay back the loan, and the loan doesn’t replace or merge in with your first mortgage. It’s a separate mortgage, which means you’ll have two sets of monthly repayments to manage.

Lenders may charge higher fees than they did the first time around and put you through an in-depth affordability test. This is because of the increased risk that comes from piling on additional debt; lenders will often require you to pay into mortgage insurance or pay higher rates to offset the risk. With this in mind, it’s important you’ve looked at all extra costs before applying for a second mortgage.

Here are some of the extra costs you may accrue when purchasing your second mortgage:

  • Landlord’s insurance (if you will be renting out one of your properties)
  • Mortgage insurance
  • Property taxes
  • Homeowners association fee
  • Cost of property repairs
  • Cost of monthly mortgage repayments

Speak to an advisor for information about taking out another mortgage. They can provide you with free, impartial advice that won’t affect your credit rating.

Can I get a mortgage if I already have one with an ex?

If you’re divorced or separated but still have a mortgage with your ex-partner, you may want to know if you are eligible to take out another mortgage. As with most mortgage applications, provided you can meet the lender’s affordability and eligibility requirements, there shouldn’t be anything getting in the way of taking out a second mortgage.

Lenders will likely check to see how much maintenance you are paying (if any), and how much of the mortgage on your ex-marital home belongs to you. They may deduct the monthly repayments on your first mortgage from your salary or subtract your portion of the initial mortgage from the total mortgage sum they’d lend you.

Alternatively, you may be looking for ways to raise enough capital to exit a mortgage with your ex-partner.

Whether you are now a single applicant or entering a new joint mortgage with another partner, check to make sure your finances are in a strong enough position to get the amount you’d like to borrow.

How to get a mortgage to buy a house if you already have one

The process of applying for an additional or second mortgage is similar to the process you went through the first time you applied for a mortgage. However, the added financial risk associated with getting a second mortgage means lenders will check your credit scores and debt to income ratio to before approving the second loan.

Even if you have a decent deposit saved up, if you want a second mortgage, you’ll have to prove you can afford the additional monthly repayments over the long-term.

Here are a few things the lender will look at when deciding whether you qualify for a second mortgage:

  • Your income: You will need to provide bank statements and payslips
  • Your outgoings: Lenders may look more carefully into your spending patterns and expenses than they did when you applied for your first mortgage
  • How well you can handle a financial ‘stress test’: For example, loss of a job, having a baby, or an unexpected increase to your living expenses
  • Your credit report:  Mortgage lenders will review your credit history and getting a mortgage with bad credit could reduce the number of approachable lenders for your second home mortgage.

Is it easier to get a mortgage if you already have one?

Getting an additional or second mortgage can be a straightforward process, but there are likely to be more in-depth affordability checks than there were when you took out your first mortgage. You’ll need to already have sufficient equity (the amount of the property that you own outright) tied up in your home as the second loan will be secured against this equity.

However, there are likely to be additional fees if you need to change the status of the mortgage on your existing property.

For example, if you are changing your first house from an owner-occupied to a rental property and intend to occupy the second mortgaged house, you may have to pay a penalty fee for changing your mortgage type. Lenders may also require you wait before refinancing your mortgage if they believe you don’t own enough of the first property outright, or have sufficient funds to make the switch.

How much can I borrow if I already have a mortgage?

Most mortgage lenders will let you borrow up to 4.5 times your salary, but the size of the second mortgage you qualify for is also determined by the amount of equity you have, along with your credit history. You can only borrow against the equity you already have, not against the full value of the house that you are paying off in your first mortgage.

To increase the potential size of the second mortgage, your finances will need to be as attractive as possible to lenders.

With this in mind, you may find it easier to take out a second mortgage if you:

  • Ensure that you have already repaid a big chunk of your first mortgage off
  • Make valuable improvements to your first property, such as new a new kitchen or plumbing

If property prices in your area have gone up since you got your first mortgage, there’s a good chance your equity has also increased. Also, bear in mind that there are mortgage lenders who are happy to offer deals based on 5x salary and even 6x salary under the right circumstances.

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Can I get a buy-to-let mortgage if I already have a mortgage?

You are eligible to take out a mortgage for a buy-to-let if you already have a mortgage. In fact, many lenders will only offer you a buy-to-let mortgage if you are already a homeowner.

Make sure you can tick off lenders’ requirements to qualify for a buy-to-let mortgage:

  • Many lenders have upper age limits on how old the borrower can be when the mortgage term ends; check to see what these are and if you’re in the right age bracket before applying
  • You need a good credit record and the income to show you can afford another property
  • Regardless of whether you own the property outright or have a mortgage, you need to already be a homeowner

Getting a construction loan when you already have a mortgage

If you already have a mortgage but would like to take out a construction loan to build another home, you’ll need to make sure you can afford to pay back both mortgages. The lender will determine whether you can afford a construction loan on top of your current regular payments.

Check whether your credit score and debt to income ratio is in a strong enough position to apply for a construction loan. A mortgage broker can help make sure you are eligible for a construction loan and take you directly to the right deal for your situation.

Getting a residential mortgage if you already have a buy-to-let mortgage

You can take out a residential loan if you already have a buy-to-let mortgage.  The deposit for a residential mortgage is typically lower than what’s needed for a buy-to-let mortgage.

However, you’ll need to carefully check to see if your affordability levels will pass all lender checks before applying for another mortgage.

How much can I borrow if I already have a buy-to-let mortgage?

The amount you can borrow will vary depending on the type of mortgage you require and the lender you choose as they all use their own internal affordability criteria.

Typically, each lender will assess your overall income and your outgoings, including those associated with your buy-to-let mortgage before reaching a decision as to how much they would be prepared to lend you for an additional mortgage.

Can I get a joint mortgage if I already have a mortgage?

Yes, you can take out a joint mortgage if you already have a mortgage.

Getting a joint mortgage can give you the advantage of being able to borrow more in your second mortgage than you might be able to if you applied for the second mortgage on your own. This is because lenders will look at the combined income of each applicant on a joint mortgage when assessing the size of the mortgage you qualify for.

However, the same rules and affordability checks will apply to your joint mortgage application. Lenders will carefully review your combined income, spending, and the amount of equity you have in your current mortgage.

Can I get a Help to Buy loan if I already have a mortgage?

The UK government’s Help to Buy scheme is available to both first-time buyers and homeowners who are looking to move, sell their property, and purchase another property.

However, you are not eligible for the Help to Buy scheme if you already have a mortgage and are looking to take out a second mortgage, as you can’t own any property when you purchase your new home with Help to Buy.

Speak to an expert advisor today

Getting a second mortgage can be an exciting and important investment for your financial future. Speaking to an expert advisor will ensure that your finances are robust before you apply for a second mortgage, and can use their whole-of-market access to source the best mortgage offers.

We offer a free broker-matching service that can pair you up with a mortgage advisor who specialises in second mortgages. We will take your needs and circumstances into account and match you with the expert best placed to help you.

Call us on 0808 189 2301 or make an enquiry and we’ll set up a free, no-obligation chat with your ideal mortgage broker today.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

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FCA disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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