First time seller, advice

Thompo17

How does it work with mortgage etc, do you re-mortgage?

ie I bought a house with a big deposit, im now going to sell and buy elsewhere how will my mortgage be affected should 1) the house sell for more than the original or 2) sell for less than the original

DVardysShadow

The mortgage is always on the 1 property. You start a new mortgage on the new property, although some mortgages allow ;porting' - really taking out a new mortgage on the same terms and conditions. Re-mortgaging usually refers to taking out another mortgage on the same property to fund a car or a holiday or credit card debt.

Cannon_Fodder

Depends on the numbers involved, different people think different numbers/percentages are "big"...

Suppose you had a £100k deposit, bought a £200k house, so had a £100k mortgage.

You come to sell;

i) For more = £250k. You may ask your lender to "port" your current deal if its a good one. £150k counts as your "equity" = the original deposit plus the value gained. You might top-up the ported mortgage, above £100k, if the new house requires more funds, (or put in some more deposit if you have funds). Or repay that mortgage and seek a complete fresh deal, if you can do better at this time, the £150k being available to count as a new deposit - the higher the deposit the lower the Loan-To-Value, the better the deal, applies.

ii) For less = £150k. "Repay" or port the £100k mortgage, leaves £50k equity. Obviously disappointing if you started with £100k. But to have lost 25% value, the next house you buy would probably (subject to differences in region/type/features) also have dropped around 25%, so a £300k house back then might only be £225k now. So you have to find £75k instead of £100k...

Not so good if you plan to downsize...

"do you re-mortgage" mostly comes down to how good the current deal is. It might be an idea to keep it, port it across and top-up with your existing lender, to avoid new product fees.


Lots of ifs and buts with such a small amount of information, i.e.;

If "less" means "less than the mortgage amount", you'll have lost the whole deposit. And be stuck with the deal you have, unless you can add funds yourself. Whether you can port to another house will vary by lender and the amount of negative equity.