If a lending institution is not able to offer sufficient finance to enable
you to go ahead with the purchase of the property, there may be occasions when
it is appropriate to look elsewhere for additional funding. This is called a top-up
loan, and secured by a second mortgage. The main lender has what is called the
first charge, and technically should be asked to agree to any arrangements for
a second mortgage. However this secondary borrowing is not necessary taken out
at the time of purchase and may be arranged later to finance home improvements
or an extension after the property has increased in value and there is adequate
security for the additional loan.
As with all your financial arrangements
you should not enter any commitment without first talking to a financial adviser
who will be able to offer professional advice and know which sources or insurances
companies to approach on your behalf. In certain cases, generally for first-time
buyers, it may be possible to arrange loans up to 100% of the valuation –
i.e. in effect the full amount of the purchase price. It can be done so do please
ask us for details.
