Moving debt/equity to move house!

Adam_Christie

Hello all.
First post on this forum!
My partner and I are desperate to move house, from my two bed end terrace to something a little larger and further into the countryside.
We each own a house, as she bought hers a few years before we got together. When I bought my house (approx 3 years ago) I was "loaned" a deposit by my dad, and I then borrowed £15k, secured on the house so that I could furnish it and get a newer car. Last year, my fiancee decided to try and sell her house, so we borrowed a further £15k on my house so that we could get it re-decorated, and put central heating in etc. We couldn't sell it in the end, so decided to rent it out.
My fiancee has the house morgaged at £65k, and it's valued at about £115k. Mine's worth about £95k, with a £30k loan, and £47k mortgage.
Basically, I want to know how, and if there is any way that we can transfer my loan onto her house, freeing up the initial deposit that I put down on my house. We'd like to convert it all to "Mortgage" rather than loans, however our current mortgage provider will only give us 60% ltv, rather than the 85% we need.
The intention is to sell my house, and use the equity in it as a deposit for our next house, we just need to be able to get at it!
Does anyone have any advice as to what we could do? Do we need to clear the loan secured on my house before we can sell it? Or can we transfer it to the new house?
Any help would be appreciated!
Adam

Fire_Fox

Sell your partners and your house, any loans will be paid off and any equity released. I don't seen what the problem is??

Adam_Christie

Fire_Fox wrote: »

Sell your partners and your house, any loans will be paid off and any equity released. I don't seen what the problem is??

Easier said than done. We can't seem to shift her house. And we know that we could get more for it in the long run if we kept it and sold it at a later date. We had it on the market for a year and we had two offers that fell through. We were about £4k out of pocket at the end of it all due to mortgage and council tax payments. If we rent it out, we can get £500 a month, and the mortgage, if we were to get one for £95k (which covers the loan on my house) would only cost us about £400 a month, so we'd be making money on the house.

Incidentally, how appealing would a house that has a tenant in it be to a buyer? I.e. a sit-in tenant?

Cissi

How do you "know" that you could get more for it in the long run? Well yes, it should be pretty much guaranteed if you're prepared to wait for a very long time, but that could be years away - nobody knows what will happen in the next few years.

The harsh truth is that if you couldn't shift it in a year then the price was too high. Unfortunately it looks like you may have less equity between you than you think.

Personally I'd really try to sell both houses rather than be saddled with the responsibilities of being a landlord for what could be a very long time, with all the financial risks that that entails. Also, don't forget that any profit that you make on the rent will be taxable. The interest payments on the mortgage can be offset, but not any capital repayment.

Fire_Fox

If your partner's house won't sell then it is overpriced for the current market; if you are so desperate to move then reduce the price. Of course you will get more for the house if you sold at a later date, that will never change due to inflation! Sitting tenants substantially decrease the value of a property as they are generally unmortgageable without vacant possession. The £500 a month rent is subject to vacancies, tenants who don't pay or trash the place, income tax, repairs ...

getmore4less

If the GF place is 2 bed move the GF back into her own house(does not have to be there all the time) and get a lodger to help with the costs. Look for someone that is looking for a short term place.

Put them both up for sale at sensible prices.

review once the first one has sold.