Can I get a second mortgage to start a business?
The equity in your home that is released by taking a second mortgage can be used to start a business. Before you consider taking out a loan against your property, consider some business fundamentals:
- How much will opening your business cost?
- Is there a market for your business idea?
- Is it likely to remain profitable in the long-term?
- Will you need to hire an accountant, a bookkeeper, or a solicitor?
- If you go into business, will you still be able to afford your mortgages (remember that you will have two)?
As long as the points listed above are met, you can begin approaching possible lenders to release some equity from your property to fund your new business venture.
Now you need to determine how much equity is in your home and then decide how much money you would like to secure against that value. The amount that a lender will offer varies between providers, but between 75%-100% of the potential equity is a good starting point. Once you’ve done this, speak to the provider you’re opting to take your second mortgage with and go through the necessary paperwork.
Once all of this is done, you will be ready to start up your very own business!