Second Mortgage

Suppose you have a partner who currently has a second mortgage in the UK and has done for a good few years.

Now you want to move to move to London and you want to go on the second mortgage with him which you can afford.

And if you are a contractor in a professional role, do you think you can get any mortgage company to give you a joint second mortgage?A solution may be that someone from your family like your father would be a ‘guarentor’ for you and would accept liability to pay the mortgage if you defaulted.

But any mortgage companies would do this and allow the 2nd person to have a guarentor but be named as the mortgage?

Well, you probably could do this, but you must be VERY careful. It’s the easiest thing in the world for your father to guarantee your half of the mortgage ( and ONLY your half) but it could turn nasty.

If you split with your partner, you’ll need to sell the house or one of you buy the other out. If neither of you could do this - which is probably going to be the case - and house prices have crashed, then your father will have to make up the difference between what equity is left after the sale and the amount owing to the lender.

The building society WILL sell your father’s house if he is unable to pay the money. Be in no doubt about this. You may think that house prices will not crash, but they DID in 1990-91 and hundreds of thousands of people who needed to sell were ruined.

It is important that you really need to speak to a mortgage adviser. Many large estate agents have an adviser who can see you by appointment and discuss ALL your options. They do it all day, every day and they know everything.

If you have no insurance (and Term Insurance is CHEAP) the surviving partner will be ruined. Imagine - a £100,000 mortgage split two ways, each paying half, and now YOU are paying all of it or having to sell the house and have nothing. Insurance will save you from this - it’ll actually set you up by paying the whole thing off.