confused about porting a mortgage and refinancing - please help !!

aween

Can anyone out there help me with this ..

I have a property at the moment worth £625,000 with a £260,000 portable mortgage. This property has been recently valued by a buy to let provider who has agreed to lend me £350,000.

I have seen a new property which is £610,000 that I would like to buy.

Can I port my existing 260,000 mortgage onto the new property, and refinance the existing property onto the buy to let mortgage for £350,000 to pay the balance of the £610,000 on the new property - is that how it works ???

Some people tell me that is fine - and others say I have to pay off the £260,000 residential mortgage with the £350,000 new buy to let mortgage which will only leave me with £90,000 towards the new property - Please can somone clear this up for me beofer I lose my marbles !!

Thanks

silvercar

Can I port my existing 260,000 mortgage onto the new property, and refinance the existing property onto the buy to let mortgage for £350,000 to pay the balance of the £610,000 on the new property - is that how it works ???

The £350k mortgage clears the current mortgage of £260k and puts 90k in your pocket. The ported £260k mortgage gives you another £260k - so you now have 260+90=350k.

To do what you suggest would mean you are not paying off your current mortgage and expecting to port it as well.

Thrugelmir

Both the remortgage of the existing property and purchase of the new property would need to be effected at the same time.

Wh05apk

Thrugelmir wrote: »

Both the remortgage of the existing property and purchase of the new property would need to be effected at the same time.

Why???????

aween

Thank you to both replies :-

They would both happen simultaneously, the remortgage and the new purchase.

I have asked my mortgage provider this question and everyone gives me a different answer that is why I am confused - over the phone the mortgage provider said I would not be paying it back so would have the 350K intact.... but I asked a friend who is a solicitor and he said the opposite which has left me really confused.

I rang my existing mortgage company again this morning and they said the that I dont pay the mortgage back if I port it... seem to be going round in circles today lol

aween

If you are a mortgage adviser perhaps you would be kind enough to explain it to me -- everyone I have spoken today has given me different info.

Thank you

Thrugelmir

Wh05apk wrote: »

Why???????

Primarily to avoid the risk of losing the terms of the existing mortgage if porting is allowed by being time barred.

Wh05apk

Thrugelmir wrote: »

Primarily to avoid the risk of losing the terms of the existing mortgage if porting is allowed by being time barred.

Your post just seemed so obscure?

"Most" lenders will allow non simultaneous completions, i.e. borrower would pay any ERC initially, but on completion of the new mortgage the ERC would be refunded, the time period being allowed being between 1-6 months normally.

With regards the OP's question, you would only receive £90k from the remortgage, with the balance repaying your mortgage, which would then be "ported" to your new property, giving you £350k in total.

Had you considered, or is it possible to keep your existing mortgage, but switch to a "consent to let" basis, and take out a new mortgage, possibly for more on the new property?

Thrugelmir

Porting merely refers to the terms and conditions attaching to your mortgage. The term mortgage actually relates to the legal charge placed on the title to your property to secure the debt.

Breaking down the transaction.

Upon the sale of your existing property. Your solicitor will receive £350k from the BTL lender. They will use the necessary funds to discharge the existing mortgage and the remaining balance after deduction of fees will be held to your account.

Your solicitor will receive a new advance of £260k from your lender for the new mortgage advance.

The only difference between this and a normal purchase\sale transaction is that the property remains in your name.

aween

Thank you so much for your reply - I feel really frustrated by the advice I was given before by the mortgage company. I have spent money now on paying for a buy to let mortgage because of what they said to me....

I really still wish to buy the new property, and I dont know if I would be able to borrow enough on a new mortgage.

the property I want to buy is £610,000 - if I switch my existing property onto a consent to let is that then considered a buy to let when ttrying to get another mortgage ?

Wh05apk

Most lenders will disregard it, provided the rents exceeds the mortgage (interest element) usually by 25%