moving mortgages with moving home?

LauraLeah91104

we are selling our house, it is on the market for £82,500, its a end terrace, 2 bed with lots of scope to extend. we have seen a house we like up for £76,000, and our mortage is only £68,000.
Would i be right in thinking we wont need another mortgage, and we can transfer the one we already have across to the new property. Also, if we do sell ours for the full asking price, and we pay £76000 for the one we want, will we get the change from the transactions once all the fees etc have been paid?

silvercar

Moving home means a new mortgage application. It may be that your current mortgage is portable, all that means is that the lender has agreed that you can have the same deal (eg 4% fixed for 3 years) on your new place that you had on this one. You still have to apply for the mortgage and the lender will value the property, look at your income and credit rating etc.

There may be restrictions on lending now eg the lender may only want to lend 80% of valuation, so it could be that, by buying a cheaper property, the lender is only willing to lend you a smaller amount.

LauraLeah91104

thanks. there isnt any deal on the mortgage, we were fixed unil october this year, but i cant see us completing before then. after that we are just normal tracker style. i know our mortgage is dropping. but the house we r hoping to buy is still worth more than our mortgage, will that make any difference. we cant remortgage as we r currently with the section of northern rock which lost their license back when it hit hard times. we have a bad credit rating from previous redundancies and problems making repayments etc. We cant get car on finance, so i cant see us been allowed another mortgage. we r in arrears with current mortgage to, but have good relationship with morgage provider, they have always been really understanding when we have had problems in the past. we were hopin to buy a new house, and with the spare cash, pay of arrears to be able to get back into the black with them. i shall have to give them a ring i think as im panicking now incase we do need to apply for a new mortgage and we gets knocked back.

puddy

you've got 15% equity if you buy the new property for its asking price and have a 68k mortgage (could be wrong, mental arithmetic)

thats not very much in this climate for the best deals, but you may still satisfy your current lenders criteria

silvercar

I would phone your lender. With a bad credit rating and high Loan-to-value ratio you are unlikely to get a mortgage elsewhere on a reasonable interest rate. It looks like your current lender is your only bet. I'm not sure they will look kindly on a new mortgage, even though logically it makes sense to reduce your mortgage size, I can see the lender being put off by your credit rating.

The way things work is that on sale the mortgage is cleared including all outstanding arrears and payments. That gives you an amount left over to act as deposit on the new place.

To be honest you are looking at a reduced property value of £6,500, your costs in moving will be about £1,000 estate agents fees, £1000 solicitor fees, £500 survey fees, mortgage application fee (?£300), costs of physically moving (?£300), bits and bobs..... By the sound of it you don' have funds set aside for the costs of moving, so you are putting yourself through a lot of hassle to drop your mortgage by £3k.

LauraLeah91104

ive spoke to our mortgage company. they have said we can apply for a new mortgage, with the figures i gave them (the same as in my original thread) they told me i wud have £16200 profit from the sale. we wud need to put a minimum deposit of £11400 down, and they wud give us £61000. thus dropping our mortage from £68000 to £61000.
That wud still leave us £4000 to cover costs etc, and hopefully a small amount left over to do with what we want.
thing is we live up north, so the majority of houses are out of our price range, so we cant even consider moving out of the area to get cheaper housing as we r already in it! so we are limited to £80000, and as we have searching there isnt many properties that is cheap enough which match our requirements, but it will cost us £500 to remove it from the market, so we may as well sell and move home, reduce our mortgage by £7000, and get a bigger and better house and have change left over, or pay £500 that we dont have and stay where we are and gain nothing and have wasted the last year in house hunting....

silvercar

Good luck, it seems a good plan. Out of interest did you mention that your credit rating is low when you asked if you can have a mortgage on the new place?

LauraLeah91104

no, i didnt to b honest. my husband doesnt have any other debt now as we have cleared it all off. just the history of it all. ive got a few credit cards, nothing more, neither one of us if bankrupt or got ccj or what ever there are. its hard knowing what is classed as a bad credit file, and are there actually people out there that do have a a* rating. Its just abit annoying that we r trying, we lost our jobs through no fault of our own, never missed a mortgage payment, only sometimes didnt pay full wack, but we always spoke to the mortgage company who were brilliant. We are trying to better our family life now we r both earning a decent amount between us of £38000 and going nowhere at all let alone fast

silvercar

its hard knowing what is classed as a bad credit file,

late payments on credit cards, utility bills, mobile phones. Not paying your mortgage every month in full.

LauraLeah91104

well yes, who hasnt had any of the above when ure trying to survive on basic SMP and JSA?
we were managing ok (well, me and the hubby werent eating, just the kids etc) but credit card companies werent prepared to help us with reduced payments, had a gud chat with somebody at the CAB and she put it into perspective for me. she said, while u r still paying in full, they wont help u as u seem to b managing fine, she said as soon as u stop making full or part payments, they will b more likely to sit up and listen. so i honestly came home and cancelled all of the standing order to the credit card companies etc. within 3-4 months of them not receiving payments, they were all willing to help us by reducing the payments etc and put us on a payment plan. 2 of which are to be paid of it full by the end of nov this year and the other two wil b settle in march next year.. utility bills are ok, not fallen behind as they r really cheap. mobile phones r cheap also. mortgage, yes, we do have £1100 arrears, but we are paying £500 of these each 4 week period, so it wont take long to pay them off, and then its just the history of the debt instead of the actual debt itself. But my hubby only had one credit card, and the mortgage, yet he has a bad credit rating. the credit card no longer exists, and was settled in full with his redundancy pay, so he doesnt have anything apart from morgage arrears under his name, but i think because we r finacially linked, my credit rating his bringing his down...ok. rant over now....lol.
We have removed our house of the market after a long honest chat with a very good mortgage broker, and realised that it would cost us double each month on mortgage payments, even with £10k less of a mortgage...thank u to all who have commented and suggested things. i really do appreciate it.