House sale pending

moleskin1

Hi All

I wondered if there is anyone out there who can help....
We have a property that is rented out that we now need to sell.
We are planning to sell to an investor so as not to unsettle the current tenants. Also we plan to port the mortgage to buy another property when we find one. We have three options when we have sold

1.Pay off the loan and reapply for a mortgage when we find a house.
2. Ask for a mortgage holiday, to take the strain off our finances for a while, but we still have the loan in place ready to move.
3. Carry on servicing the loan , and not risk not being turned down for a new mortgage.

Thanks for any ideas.
Moleskin

G_M

What are the chances of being turned down for a new mortgage? They are harder to get nowadays, so is your salary enough for the loan you will need? Or will it be a BTL mortgage?

If your current mortgage is BTL and the new one will be for your home, you could get a better deal.

What rate are you on? What savings do you have? What loan will you need?

Even porting the existing mortgage you'll need a valuation on the new property to ensure it's acceptable, and you'll incur legal costs on the port, so the process will not be that much simpler than applying afresh.

silvercar

moleskin1 wrote: »

Hi All

I wondered if there is anyone out there who can help....
We have a property that is rented out that we now need to sell.
We are planning to sell to an investor so as not to unsettle the current tenants. Also we plan to port the mortgage to buy another property when we find one. We have three options when we have sold

1.Pay off the loan and reapply for a mortgage when we find a house.
2. Ask for a mortgage holiday, to take the strain off our finances for a while, but we still have the loan in place ready to move.
3. Carry on servicing the loan , and not risk not being turned down for a new mortgage.

Thanks for any ideas.
Moleskin

1. this works and lenders will often allow you to restart the same deal if the gap is less than 6 months.

2 & 3. don't work. Once the property is sold the mortgage has to be repais to allow the buyer to secure their own mortgage on the property and you can't have a mortgage (which is really just a secured loan) without it being secured on a property.

Any new mortgage is a new lending decision (based on your income or rental income, property valuation and your credit rating). Allowing you to port your current mortgage just means that the lender will allow you to have your current deal ( interest rate, fix etc) on the new mortgage.

G_M

silvercar wrote: »

Once the property is sold the mortgage has to be repais to allow the buyer to secure their own mortgage on the property and you can't have a mortgage (which is really just a secured loan) without it being secured on a property.

Not always true. Some lenders WILL allow the mortgage to continue for a limited period even though unsecured ie the original property is sold and charge removed and new property not yet bought. However this only happens in rare occassions where the lender is very confident you will continue repayments and will either buy a property within the time limit imposed, or pay back the full loan.

moleskin1

Hi Silver car
Thanks so much for your help, some valid points that had not occurred to me.
Regards Moleskin1

moleskin1

Many thanks GM for your advice, a big help.
Regards Moleskin1