part exchange query

thesun_2

hi everybody

we are looking at part exchanging our home.

we have a current mortgage of 80k on our property which is worth roughly about 100k.

we have someone interested in our property who has a property for sale for around the 200k figure.

if they are wiling to give us 100k for our property...how much do we require to have for a new mortgage to buy the property (worth 200k). if we switch our mortage do we have to pay the value back to the mortage company or not.

am i right in thinking that we can use the 100k to pay off the new house as opposed to paying off our mtg which is being switched?

can anyone explain this to me??

natman

thesun wrote: »

hi everybody

we are looking at part exchanging our home.

we have a current mortgage of 80k on our property which is worth roughly about 100k.

we have someone interested in our property who has a property for sale for around the 200k figure.

if they are wiling to give us 100k for our property...how much do we require to have for a new mortgage to buy the property (worth 200k). if we switch our mortage do we have to pay the value back to the mortage company or not.

am i right in thinking that we can use the 100k to pay off the new house as opposed to paying off our mtg which is being switched?

can anyone explain this to me??

Ok, I am presuming the peson that is interested in your house is a person rather than a builder?? and in turn you want to basically swap houses??

Ok your mortgage -
1st Rule on mortgages -you can only have one supplier for your mortgage i.e you cant keep your current mortgage with your current lender and borrow the extra frm another source - you can either transfer your current mortgage (port it over) and top up the difference with what your current provider gives you............ start a brand new mortgage for the whole amount with your current provider or a new provider - So basically only one provider per mortgaged house......

Ok the money - this is in real lemans terms so you understand.
You have Mortgage for 80k

lets say you sell your house for 100k -

lets say you find a house for 200k

in simple terms - you get 100k, you pay off the 80k mortgage, this leaves you 20k for a potential deposit.

your new house would be 200k, therefore you would need in total - 20k from your sale and new funds of 180k which adds up to 200k....This is a scenario for starting a fresh mortgage so you would need 180k in a mortgae for this house.

if you plan to keep the mortgage of 80k and you are allowed to transfer this money to a new property you would need an additional 100k to complete the house -
20k money made from sale
80k current mortgage
100k new mortgage - amount totalling 200k

This is a very simplistic way of looking at it, however you have to bear in mind that you will have extra costs - solicitor, fees, searches moving costs etc etc etc, theses can be well over £6,000.......

You say you get 100k for your house and you would like to put this down as a deposit- this is not really your money is it, the only 'TRUE MONEY' you have is the 20k that is made from anything above your mortgage amount.
You either pay off the 80k mortgage amount and start again or speak to the provider about borrowing an extra 100k and see if you can actually borrow this amount

DVardysShadow

While mortgages can be 'ported', this only really relates to transfer of Terms and Conditions. As far as your purchase and sale is concerned, you effectively pay off one mortgage and start another.

You must pay back £80 on the old place, leaving you with £20 of equity for a value of £100. If you part exchange, you have £20 from the old place and you need a mortgage of £180. Your seller gets £100 from your new mortgage plus your old place. The £80 left over on your new mortgage goes to pay off your old mortgage

thesun_2

natman wrote: »

Ok, I am presuming the peson that is interested in your house is a person rather than a builder?? and in turn you want to basically swap houses??

Ok your mortgage -
1st Rule on mortgages -you can only have one supplier for your mortgage i.e you cant keep your current mortgage with your current lender and borrow the extra frm another source - you can either transfer your current mortgage (port it over) and top up the difference with what your current provider gives you............ start a brand new mortgage for the whole amount with your current provider or a new provider - So basically only one provider per mortgaged house......

Ok the money - this is in real lemans terms so you understand.
You have Mortgage for 80k

lets say you sell your house for 100k -

lets say you find a house for 200k

in simple terms - you get 100k, you pay off the 80k mortgage, this leaves you 20k for a potential deposit.

your new house would be 200k, therefore you would need in total - 20k from your sale and new funds of 180k which adds up to 200k....This is a scenario for starting a fresh mortgage so you would need 180k in a mortgae for this house.

if you plan to keep the mortgage of 80k and you are allowed to transfer this money to a new property you would need an additional 100k to complete the house -
20k money made from sale
80k current mortgage
100k new mortgage - amount totalling 200k

This is a very simplistic way of looking at it, however you have to bear in mind that you will have extra costs - solicitor, fees, searches moving costs etc etc etc, theses can be well over £6,000.......

You say you get 100k for your house and you would like to put this down as a deposit- this is not really your money is it, the only 'TRUE MONEY' you have is the 20k that is made from anything above your mortgage amount.
You either pay off the 80k mortgage amount and start again or speak to the provider about borrowing an extra 100k and see if you can actually borrow this amount

thanks very much for your reply