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Old 13th Feb 2009, 11:45
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Bealzebub
 
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I am not sure I understand what you mean? a mortgage is a legal registered charge, that enables the lender to repossess the building and enforce the sale of the property to recover the debt.

If you are in a position to borrow the sums you want within the overall lenders criteria, then yes you can use any mortgage that is made available to you. Obviously the security (the property) would have to have sufficient value to cover the lenders liability. Normally the lender will require that the loan doesn't exceed a percentage of the assessed value of the property. These days that might be anywhere from 60% to 90%, and the interest rate charged on the loan will often be in direct proportion to the relative size of the loan. In addition the lender will usually set criteria based on the borrowers income as to what limit of loan they will advance.

If the potential borrower is seeking a second mortgage (and second charge on the property,) then not only would the new lender have to satisfy themselves that there was adequate security (equity) still available in the property, to protect themselves, but they would also need the permission of the principal lender (who is first in the queue) to register themselves on this security. In addition the same basic rules regarding income and lending multiples would also probably apply.

So to that end, the answer is no. You cannot use a mortgage where you are the borrower, as a security, since it isn't your security, it is the lenders.
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