Selling a property? Porting a mortage?

Amiz87

Hi Everyone,

I wonder if anyone can help, as I'm not up on all the jargon.

We have recently decided we would like to move out of the town we are living in, and have started to look around.

We have lived in our current property for about 4 years and bought it for £177,500 (way to much but we loved it so much at the time) we knew we would be losing money on it due to the down turn in the market but thought we could market it for around £170,000. our mortgage is currently for £160,000 - on interest only (accord mortgages)

We have found a property we are interested in which is also £170,000. so i spoke to my mortgage company and asked what we can do as we are in a 5 year fixed rate till May 2012. They advised we could do something called "porting" and if no extra funds were required we basically just tell them we have moved.

we thought this was perfect and thought we could sell for around £173,000 and put an offer on the new property for £168,000 thereby leaving the mortgage at £160,000 and using the equity to pay for the difference on the new house and the solicitors fees.

all seemed great until...

we have had our house valued and have been told its worth around £160,000 (the market has taken a bigger dip then we thought)

sorry i know i have waffled but essentially my question is...

can we take out more funds when porting...IE keep the 160,000 we currently have on the rate we have and then add £10,000 at a different rate?
and secondly will they allow this as technically its 100% mortgage and i have heard alot of mortgage companies don't do this anymore, but i didn't know if the rules where the same if your porting and just topping up!

if anyone can explain my options (without all the jargon) i would be so grateful

kind regards

Amy

Thrugelmir

Speak to your lender and explain the situation. As quite possibly they will be reluctant to lend more bearing in mind you are on an interest only mortgage.

How you intend paying for the costs of selling and buying ?

kingstreet

Portability is the ability to transfer the rate from one mortgage to another when you move house. It is not a guarantee of a mortgage, merely the opportunity to see out the original offer. You will need to meet the lender's maximum loan to value criteria - ie 90% or perhaps 95% of the new property purchase price.

In practical terms, you have to approach your lender for a new mortgage on the new property and satisfy their current criteria and status requirements. If you are borrowing less, a partial repayment charge will be likely. If you are borrowing more, the extra money will be on a choice of the lender's current products, with the current rate ported to the existing amount you owe for the remaining time.

Try to match the new deal (if you need one) with the time remaining on your current deal so you know you can move the whole mortgage to a new deal or new lender at the same time.

Given the figures you mention, I'm not hopeful you'll be able to do this.