Porting a mortgage with neagtive equity

DoodyDo

I'm a little confused and need help.

I bought a new apartment 2 years ago for £130K I now need to sell it but i'm only likely to get between £115K and £110K and my remaining mortgage is £118K.

Me and my partner want to buy a house for around £90K and was wondering if we could port my existing mortgage and negative equity over as we are purchasing a cheaper property.....

Do anyone know if this is possible?

CPS

Depends on your lender but I woudl say probably not. I am in a similar position (although with more negative equity than you) and enquired if I could buy another house but my lender (Standard Life) said no, I would have to fully redeem the mortgage meaning I would have to pay off the mortgage in full first - i.e write a cheque for what I owed them in Neg Equity, in my case approx £25k.
Even if you can afford to do that, you will probably still need a 10-15% deposit for your new place on top of the Neg Equity and all of the costs associated with moving, so I reckon you need £30k odd to make this move.... But check with your lender

Berkshiregirl

I think this would be unlikely as you'd be asking for a £118k mortgage on a property worth £90k - well over 100%.

You'd need to find a way to pay off the £3k - £8k negative equity and find at least a 10% deposit on the new place, so around £15k in order to do this.

cattie

Why not ring your lender & ask them as they are the only ones who will know the answer to your question?

Charlton_Taz

Almost certainly not something you can do I'm afraid. Even the most generous mortgages today are lent at 95% LTV, which would mean if you are buying a property for £90K, the most a lender would lend you is £85.5K. You would have to clear the difference i.e. £118K-85.5K = £32.5K by some other means.

Cissi

Charlton_Taz wrote: »

Almost certainly not something you can do I'm afraid. Even the most generous mortgages today are lent at 95% LTV, which would mean if you are buying a property for £90K, the most a lender would lend you is £85.5K. You would have to clear the difference i.e. £118K-85.5K = £32.5K by some other means.

I agree that you won't be able to do this without a sizeable deposit, but it shouldn't be as much as that. Assuming that you do get £110k for your house, you'll need to find £8k to cover the negative equity, at least another £5k for the deposit, plus stamp duty and moving costs. I'd say that realistically you're looking at somewhere near £20k, (it would be better if you could find nearer £9k for your deposit on the new place).

Charlton_Taz

Cissi wrote: »

I agree that you won't be able to do this without a sizeable deposit, but it shouldn't be as much as that. Assuming that you do get £110k for your house, you'll need to find £8k to cover the negative equity, at least another £5k for the deposit, plus stamp duty and moving costs. I'd say that realistically you're looking at somewhere near £20k, (it would be better if you could find nearer £9k for your deposit on the new place).

Yup..you are right! My maths is right up the creek! Thank you for putting me right...and apologies OP, you don't need as much money as I first thought!