Confused about Mortgage

annibee

Hello Mortgage Gurus,

Could someone answer a (possibly stupid) question for me as I'm confused

If I move house and buy a house that is less than what I sell my house for but I stay with the same mortgage provider do I have to fill in another mortgage application, have another credit search etc?

Thank you for helping

kingstreet

Indeed you do.

You sell a property. The mortgage is repaid.

You buy a property. The new mortgage starts.

The only connection is you may be able to transfer the rate from the old mortgage to the new mortgage under what's known as "portability" but you have to meet the lender's current criteria for a new mortgage first.

annibee

Thanks for your quick reply!

It is as complicated as I thought it would be then. Now I'm worried because our income is half of what it was when we bought the house (thanks to 2 redundancy's).

Suppose it doesn't count for much that we've never missed a payment?

If we do this "Portability" you speak of do we just ring up our current provider, tell them we're thinking of moving and ask to apply or what? Sorry I'm just trying to get my head around things.

Im starting to worry now that we wont be able to get a mortgage because of our income.

Also as we were thin king of doing work on the house to make it saleable I'm now wondering if its even worth it. We were thinking we spend x amount now we'll get it back in the sale but what if we cant get a mortgage then we'll be x amount down and still stuck in this house.


Another probably daft question - how do you apply for a mortgage when buying your 2nd home. - so with the first we said .... we have a deposit of 20% and the house prices we are looking at are £XXX will you give us a mortgage then we got a provisional yes etc.
This time I'm not sure what our deposit will be as it will be based on the sale of our house.
Am I even making sense now? I know what I'm trying to say but struggling to word it lol.

Should I/ can I apply for a mortgage before we start messing around with house just in case we're rejected or what.

I'm so sorry if this is not making sense but if you can understand what I'm asking I'd be grateful for some advice

Thank you

kingstreet

You should be able to port your current rate, if it's worthwhile and if you meet the lender's current criteria.

It's too early to apply, but it may be worth using your lender's affordability calculator to see how much they might be willing to lend you.

You're going to have to decide how much you're prepared to sell for, then deduct from that the current mortgage balance, plus any fees that might apply, plus your other selling and buying costs to see what you've got left over for your next deposit. Add that to what you get from the calculator I mentioned earlier to see what your maximum purchase price might be.

If I were you, I'd find a good whole of market broker to get an idea of what you can and can't expect. Don't use the advisers from large estate agency chains who have limited panels and might charge a fee on top of any commission they receive from the lenders.

annibee

Thank you again

We had a great guy last time who got us this mortgage when oh had thousands of debt and I had no credit history whatsoever so I might ask him. He's independent but does work for a couple of different estate agents as well if that makes sense, We used him but didn't use the estate agent's he worked with last time.

Our current rate is due to end in Feb we are on a 2 yr tracker (if that sounds right lol).So from what I understand after that we go onto a different rate but ideally I want to be selling around that time.

Quite frankly it all confuses me we've been paying off over £700 pm and when we got our statement it had all these credits and debits and a closing balance of only £2k less than what we borrowed so that's confused me anyway as I don't know what we will get back when we sell etc. (maybe you can explain in simpleton why we've only paid 2k off lol)

Thanks for the calculator idea I didn't even think to do that I'll go have a look now
I know what we want to sell for and luckily the house 2 up from us went on the market recently at 40k more than what we paid for ours. We've had a nosy online to see what theres looks like and some good points are that our garden and driveway are bigger and our kitchen has been extended so I'm guessing we can put on market for at least the same price.

annibee

Well on their calculator they wont lend us enough because of our current financial situation. Guess we're stuck here then Thanks for the help/advice anyway

kingstreet

Talk to your broker. Don't assume it's a done deal you can't move until someone tells you you can't.

I'm a mortgage broker. Pessimist is my middle name.

annibee

Thanks I will follow your advice and speak to a broker