Self employed, already have a mortgage but need a further £25,000 to move house.

Jeanie_Olivia

I have been self employed for four years.
I switched my mortgage to Nat West (2yr fixed rate to run for 10yrs) in December 2010.
Mum died in February 2011 and I have not worked but have been living off my savings since then.
I have taken a job and will be employed from the end of this month.
My mortgage payments have continued to be paid on time and there are no arrears.
I have seen a house I would like to buy, this is approx £25,000 over the value of my current property.
I would like to transfer my exisitng mortgage to the new property and apply for a second mortgage for the outstanding £25,000.

Is this the correct thing to do?
What are the chances of my lender agreeing to this???

Thanks in advance for any advice!!!!

Zogger

I imagine it would all depend on the LTV and whether you can find a lender that will lend to you during a probationary period and based on no self-employed income for those months
What is the value of the two houses and how much is outstanding on the mortgage?

'Correct' is rather subjective!

edit: don't know why I wrote find a lender when you are already stuck with one!

kingstreet

Jeanie_Olivia wrote: »

I would like to transfer my exisitng mortgage to the new property and apply for a second mortgage for the outstanding £25,000.

Is this the correct thing to do?

It isn't quite.

You apply to your lender for a new mortgage for the whole amount. A mortgage isn't transferable from one property to another. If you can satisfy the lender's current criteria you may be allowed to port your current rate to the new mortgage with any extra borrowing being given on one of the lender's current products.

Portability, as it's known, does not give any right or guarantee to a new mortgage on moving.

Jeanie_Olivia

The value of my current property is £180,00, the property I would like to buy is on the market for £205,000.
I have an outstanding mortgage of about £46,000.
I expect to receive £50,000 from my Mother's estate within the next 12 months.

Zogger

As above really the only way you can know is for the lender to approve it. In terms of LTV you are going from 25.5% to 32.6% and I'm very much not an expert but that doesn't sound like a terrible position. The concern would be the usual caveats of whether you still meet Natwest's affordability criteria and whether the new property is a secure investment for the bank etc.

dimbo61

If you do manage to get a bigger mortgage with Natwest consider any deal for the Extra borrowing where you can repay the second mortgage / Loan quickly once you have received the money from your mum,s estate without paying ERC,s and then overpay the fixed part!