Calling all Financial and Mortgage Advisors, need help!

Donnam155

This is a complicated one to explain but hopefully i do it justice as we need help!! Basically my partner and i are looking to move to a larger property but we will be staying with our current mortgage lenders Natiowide. We currently have a mortgage of £139,500.00, it is likely we will only sell our house for £130,000.00 so that leaves us oweing Nationwide £9,500.00. I called Nationwide to ask if that could be added to the new mortgage for the larger proprty, i was advised yes.

Now this is where it gets confusing. We are looking for a borrowing of 95%. When we worked it out based on us buying a £175,000.00 house we worked out that we would need a mortgage of £175,000.00 and then add the deficit from the previous mortgage of £9,500.00 so mortgage in total £184,500.00 then we worked out that we would then only need the 5% deposit of £184,500.00 which is £9,225.00. Then, after thinking about it, its not really a 5% deposit they want is it, its more that you can only borrow 95% of the value of the property. 95% of the property value of £175,000.00 is 166,250.00 which means althpugh we would be paying a 5% deposit it isnt 95% of the property value so we cant therefore actually add it to the mortgage as it gets included in the 95%, am i right in thinking that? is there no way we can add the deficit to the new mortgage as an additional borrowing or anything so we dont have to fork out a 5% deposit of £175,000.00 and on top have to cover the costs of the deficit which is likely to be another 9,500.00? Hope that makes sense??

silvercar

If the maximum LTV is 95% of the new place and the value is 175k, then they will only lend you 166.25k. However you cut and splice the deposit, neg equity payback and other costs is immaterial.