'Moving' Mortgage

Debtor

Hi all,

a quick question.......an example scenario...

we have an interest only mortgage of £100k
we sell the house for £90k, so we owe the bank £10k.
we buy another house for £150k. Can the £10k that we owe the bank from the first mortgage be 'taken' with us and added onto the new mortgage, or must it be paid right away?

thanks!

D

Tuscan

if it was possible which i dout it is it would mean you would owe 160k on a 150k house so will be in negative equity from the start.

you will have to find the 10k to pay off the mortgage on the 100k, and you will then need a deposit for the new house and moving cost..

JimmyTheWig

As per tuscan, I don't think your numbers work, but maybe you've missed something in the simplification.
If you are buying and selling at the same time then all the money should get sorted at once. The solicitors take care of it. So in effect you would be paying off the 10k right away.

But if you are in negative equity now then, unless you have new money to throw at the new situation, then you would need more than 100% mortgage, which I can't see anyone giving you in this economic climate.

Let_Us_See

In theory yes, but you would have to complete the sale and purchase at the same time. However, you will need a suitably sized deposit for the purchase as it will have to include the £10k balance.