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Can I transfer mortgage from 1 house to another?

Hi All

This sounds like a simple question, but I am not too sure.

Basically I own a property which is valued around 125k and has a mortgage for 90k. The mortgage was a 5 year fix and now has 4 years left.

I also have a property worth around 105k which is mortgage free. I want to transfer the mortgage from 1 house to the other (Please dont ask why). Is this possible? both properties are in my name. What will my costs approximately be?

Many Thanks
«13

Comments

  • SquatNow
    SquatNow Posts: 2,285 Forumite
    Is this possible?

    No. You'll need a new mortgage.

    And you are now unlikely to get anywhere near as good a deal on a 5 year fix. You'de be looking at 90%LTV if you're lucky.

    And your estimated values on the properties are meaningless... surveyors are being a lot harsher now... they use to speculatively value up, now they value down. I wouldn't be at all supprised to find the banks estimated value of the £105k property to be below the 90k mortgage value.
    Bankruptcy isn't the worst that can happen to you. The worst that can happen is your forced to live the rest of your life in abject poverty trying to repay the debts.
  • MarkyMarkD
    MarkyMarkD Posts: 9,912
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    That's not really true, SquatNow. If the original mortgage allows portability (and most do) then the lender should be happy to allow the mortgage to be moved to the other property, subject to the new property meeting their lending criteria and the OP's income and credit history still satisfying their lending criteria.

    Effectively it is a new mortgage, but with the remaining term (and rate) of the original one. And doing it this way would avoid incurring a significant ERC if one applies.
  • SquatNow
    SquatNow Posts: 2,285 Forumite
    MarkyMarkD wrote: »
    That's not really true, SquatNow. If the original mortgage allows portability (and most do) then the lender should be happy to allow the mortgage to be moved to the other property, subject to the new property meeting their lending criteria and the OP's income and credit history still satisfying their lending criteria.

    Effectively it is a new mortgage, but with the remaining term (and rate) of the original one. And doing it this way would avoid incurring a significant ERC if one applies.

    True some mortgages do allow that, but I doubt they'de let the OP do it when moving the mortgage to a property with a LOWER value... in fact there is no chance as it would mean a significant change in the LTV Ratio... unless of course the OP payed off a large chunk of the mortgage first.

    I assumed the OP didn't intend to pay off a large portion of the mortgage, cos if he could he already would have factored that in!
    Bankruptcy isn't the worst that can happen to you. The worst that can happen is your forced to live the rest of your life in abject poverty trying to repay the debts.
  • MarkyMarkD
    MarkyMarkD Posts: 9,912
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    The new mortgage would be for under 90% LTV; the original mortgage was for just over 70% LTV. That difference isn't particularly a big deal - most lenders are happy lending up to 90% and most charge the same rate for 70% LTV as for 89%.

    So I don't think it will be a problem, let alone "no chance".
  • hedgen
    hedgen Posts: 13 Forumite
    Our mortgage is only portable where the value of the house is roughly the same as it is currently, as otherwise the risk for the mortgage company changes.
  • silvercar
    silvercar Posts: 46,865
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    You said "don't ask why" so I won't, but:

    If your reasoning is to claim the mortgage interest as an allowable expense against rental income, you don't need to move the mortgage. Mortgage interest is an allowable expense wherever it is secured.
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  • MarkyMarkD
    MarkyMarkD Posts: 9,912
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    Well done, silvercar. But of course it would depend (irrespective of the security for the mortgage) on the value of the property when it began to be let, not its present value.
  • SquatNow
    SquatNow Posts: 2,285 Forumite
    MarkyMarkD wrote: »
    The new mortgage would be for under 90% LTV; the original mortgage was for just over 70% LTV. That difference isn't particularly a big deal - most lenders are happy lending up to 90% and most charge the same rate for 70% LTV as for 89%.

    So I don't think it will be a problem, let alone "no chance".

    A) The 90% LTV is based on the OPs estimated "value" being accepted by the banks... very unlikely.
    B) A bank isn't going to allow a customer to move a mortgage from 70% LTV to a 90%LTV without ramping the rates or adding a huge fee. Lots of banks offer it on paper, but in real life they just wont do it. Especially not on a 5 year fix.

    The basic answer is, if he asks the bank they will say no.
    Bankruptcy isn't the worst that can happen to you. The worst that can happen is your forced to live the rest of your life in abject poverty trying to repay the debts.
  • rlc22
    rlc22 Posts: 385 Forumite
    SquatNow wrote: »
    A) The 90% LTV is based on the OPs estimated "value" being accepted by the banks... very unlikely.
    B) A bank isn't going to allow a customer to move a mortgage from 70% LTV to a 90%LTV without ramping the rates or adding a huge fee. Lots of banks offer it on paper, but in real life they just wont do it. Especially not on a 5 year fix.

    The basic answer is, if he asks the bank they will say no.

    Are you psychic? Or perhaps you're the mortgage lender?

    Surely the advice to the OP is: ask your lender!

    Then there's no need for any speculation!

    And in response to A) above, perhaps OP is a surveyor or has looked for recent comps...... it's very negative to assume that they're way off base with their valuations
  • clutton_2
    clutton_2 Posts: 11,149 Forumite
    ignore all the above - ask your lender ...........
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