Porting Britannia mortgage and borrowing less

bobbadog

Hello

My OH and I have a flat in London which we've owned for just over a year. We purchased it for £179,950, borrowed £162,000 on it. 10% LTV. We got this mortgage on a combined salary of £43,000 p/a, and with combined debts of £7,000.

Now, a year on, our flat is worth approx £195,000. We owe £160,000. We have the same combined salary (mine's under review, so hopefully £2k more by time we move) and combined debts of £13,000 (used to do renovate house).

Our mortgage is 4.3% fixed, 3 years, Britannia. We'd like to port it. We have to now have 15% LTV to get this product.

We'd like to move to our hometown. Houses are cheaper there. We'd like to purchase for about £150,000 - so a deposit of £22,500 and a mortage of £127,500. We have to pay a 2% ERC as we'll be borrowing less.

So, presuming we sell our flat for the full £195,000 we're hoping, that would leave us £35,000 equity. Pay the deposit on the next house, leaves £12,500, which can be used, after fees etc, to clear most of our debts and reduce our mortgage by about £200 a month.

We've not missed any payments on our CC's or anything, but may have a late or two (only a day late, may not even be on our credit file) - and when we took out our mortgage originally, I had a default visible on my credit file - which has now dropped off.

So my question - does the fact that we now owe more on CC's make a difference in the loan application, beings we want to borrow less next time and we'll clear the debt on moving? Are we likely to have any problems? xx

bobbadog

Just to add, based on Britannia's criteria, they'll lend us: £161,250, without considering bonuses etc and my part time job (3.75 x joint income). We'll be asking for much less than this. I'm just worried about the debt aspect.