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Can I get a mortgage to buy my shared ownership flat outright?

I own 60%, the housing association the other 40%. I bought the flat at a full market value of £150,000 in Feb 2007. Through my existing mortgage I have paid off about £13,000 of the £90,000 borrowed. I'm 3 years into a 5yr fixed rate deal with Santander. I'd like to buy the remaining 40% as my income has increased to £41k. The value of the flat is probably £145,000 to £150,000 so I'd need an extra mortgage of £58,000 to £60,000. The question is, can I get an additinal mortgage through lenders other than Santander? e.g. HSBC or somehwere else? Or do I have to have the two mortgages through the same lender? Would HSBC insist on having a 10% deposit even though I would have the deposit through another lender? I have about £5,000 I can put towards the purchase, e.g. £1,000 legal fees, £2,000 to give me an overall 10% deposit (£15k of say £150,000), and £2k for arrangement fees and survey. Any mortgage advisors out there?

Public Comments

1. There is no real reason why you cannot have 2 mortgages with 2 different lenders. Do not get confused about the "deposit". Lenders will not usually lend more than a certain percentage of the value of the property. Typically at the moment you won't get more than about 80%. The remaining 20% is not a "deposit" as such, and there is no need to have that money available in cash. A lot of the confusion comes because in a normal house move purchase the seller does want a deposit, so you do need to provide cash up front, and this is also a big part of the extra cash you need to provide on top of the mortgage. As you are effectively re-mortgaging to buy out the shared owner, the lender will make their decision on how much to lend based on the equity in the property in total. EG they will only lend so much that the total amount owing on the property is (say) 80% of its actual total value. Obviously the actual percentage depends on the lender and their assessment of your financial security. The situation is made slightly more complicated if you have 2 different lenders, because the first lender takes priority, so if things do go wrong they will get what they are owed first. The second lender then gets what's left. So the second lender might be even more conservative with what they are prepared to lend. My guess is that if the house is worth £150,000 and you only have £13,000 equity, then you will struggle to get a mortgage for all of the remaining £60,000. If the lender wants at least 20% equity then you will get at most £43,000 and you would have to find £17,000 cash.
2. No reason why not if you qualify although it is best to stay with a single lender as it keeps matters tidy. Speak with your existing lender about it before you decide to go elsewhere.