Advice please on buying new property/remorg

MrMrMr

Hi

is it possible to remorg my current property, and use the extra cash (I have double equity in it), for a deposit on another house?

So I want to buy another house, but need to move asap, I dont have much deposit, so need to release some equity, to be able to buy the other house.

or if I can muster up the 10% needed for deposit on the other house, leave my current house up for sale, then get 90% new morg on the new house, whats the best situation once my current house sells? ie I want to put the money into the new house, to reduce the new morg payments - is this possible, if so how/what deal/what do ask for?

Ive been on to my current bank, and they will allow us to have anew morg, 10% deposit, but obviously the payments are massive, so once orig house sells, how do I then put the equity into the new house to redue payments?

I hope I havent confused too many people, as its confusing for me!?!?

cheers

Cannon_Fodder

You can remortgage to release some equity to give you a better deposit.

Your income would then need to support that 'equity-releasing' mortgage, and the new mortgage you would need for the balance of the new place. Do you think that would be feasible?

If your income can support that arrangement, or if you go for the "scraping together 10% deposit" option, you may find you get charged 'early repayment charges' when you sell the original place and want to use the equity to reduce your mortgage on the new place - perhaps 3% of the value, i.e. £thousands. Pick a product that avoids that if possible.

Why not just sell and buy in one go? The equity is then the deposit, without the need for remortgaging fees or potentially a survey fee to check existing house value, etc. (You'll need to pay for a valuation/survey on the new place, whichever way you do it.)

Most sellers recognise the need to build a chain.

MrMrMr

The reason I may have to do this before my current property sells is I need to move asap for school catchment, also the house we have seen is empty and an investor ie cash buyer is interested to.

I phoned my current morg dealer, and they said they wont remorg current to release equity, which I was surprised at, so it looks like I will have to get a 10% deposit and then buy the new house outright as such. I was surprised at this, as this would have been the ideal, ie get some cash out of this current house, for bigger deposit to reduce morg payments on new house, this was Halifax btw.

any other ideas on what I can do please?
cheers

VIGILANT22

How are you going to purchase the new house?

You say you dont have much of a deposit but you can "buy the new house outright".........what with??

MrMrMr

VIGILANT22 wrote: »

How are you going to purchase the new house?

You say you dont have much of a deposit but you can "buy the new house outright".........what with??

I told you I was confused!?!?

What I mean is I may now be able to get the minimum deposit - 10% for the new house, and then a new morg for the rest on the new house. this would then still leve me with my current house up for sale,and still paying for a morg on that.

so I would have 2 morgs, but the new morg would be a lot higher payment than I expected due to not having the equity of the current house to put in.

Does this make anymore sense? sorry about it,

VIGILANT22

Well it makes sense what you write, whether it makes sense to the lender for affordability will be another matter.

The lender/s will decide on whether you can support 2 mortgages, based on yr earnings/ outgoings/liabilities/dependants etc.......

MrMrMr

they seem to be able to offer me 2 morg, but question is should I remorg current property for a bigger deposit or just use the 10% and the rest morg?

Or should I risk trying to rent my current property? and just get a new morg on the new house with 10% deposit?

really looking for some solid advice to help, the house we're interested in are taking final bid offers and going to final offer on Fri, so need to decide by then really

dimbo61

Consider offset mortgage ! that way when you sell your current home you can put the money into the offset account on the new property.
Ybs do 85% LTV but you need 15% deposit and pass there affordability checks

MrMrMr

My lender currently says I need a 16% deposit for the new morg so thats a possibility. Not sure on what offset morg is, any recommendations?

also just typed in a few on other lenders and the deals. or at least the monthly payments on compared to my lenders quote are massively different.

quoted around 1000 for 144K borrowing, whereas, some others are nearer 850/month, why this? is Halifax bad for morg at mo, or am I typing something in wrong?

JA1000

You are just quoting the mortgage for the new property - You will have TWO mortgages and the same income, they will need to see proof you can cover both mortgages.

MrMrMr

yes thats true, and they have said thats it ok, what I want to find out which is best way to go? rent/remorg (if poss) current house, buy new house new morg

wait to sell current, then buy new house.

want a way to be best really, dont know about offset morg or who? if its poss to remorg current to get more money for new (if this is sensible?)