Advice on moving house please:

burns

Hi,

I have been living in my first house with my partner for the last 9 months. We have had quite a few problems with our neighbours during this time (they are noisy and stay up late watching TV) not helped by the fact that the walls in my house are paper thin!

We have had just about had enough and are seriously considering moving. I think our house is roughly worth 140k (we bought it for 134k and still owe around 132k)

Ideally we would like to move to a bigger place, in a different area. The houses we have been looking at are in the 160k mark so we would have to borrow another 25k. I had a meeting with HSBC whom our mortgage is with and they said they could only borrow us 95% of an extra amount, so we would have to find 6-7k of our own money. This is out of the question as we only have about 3k savings. HSBC suggested that we overpay our mortgage and review the situation in 6 months but I honestly don't feel I can put up with it for much longer.

I would really like some advice as I'm not quite sure what my next step should be. We had planned to stay in our current place for atleast a couple of years but I really can't see this happening.

Realistically I feel that we should be probably be moving to a bigger 3 bedroom house and I had hoped that HSBC would lend us the extra money with out any problems as we can afford the extra repayments every month. Is it possible to borrow the extra amount with another mortgage provider with out a deposit?

I don't really want to move to a house that is the same price as their is no real progression and we would have payed out all the fees etc twice in the space of a year.

Thanks

peterg1965

it will cost you a few thousand pounds to move house, Stamp Duty, Estate Agents, Solicitors, removals etc etc. This could amount to £4-5K, that eats up a large portion of your equity.

An option is to have a look at mortgages that allow you to borrow more than the property value, but be very aware of the risks and what you are getting into. I think that Northern Rock do a mortgage (called 'Together'), which enables you to borrow up to 125% of the property value. 95% secured on the house and 30% as an unsecured credit facility (up to a max of £30K), this may suit and there may be other lenders that do similar products. In this case, for a £160,000 house the mortgage would be £152,000 and you would have an unsecured credit facility of £30K. You wouldnt have to use all of this. If you sold your current house for £140K you would have equity of £8K, take off £5K for moving, leaving £3K you would need a deposit of £8K on the new house, so you would have to borrow 5K from the unsecured facility. Alternatively, you could take a 95% mortgage from any provider and borrow the additional money on a competitive unsecured basis.

How you go about it depends on your finances, circumstances and your ability to afford the additional mortgage/loan.

Also when you sell your current house you will need to be very honest with your solicitor when it comes to answering questions about your current property. You will be asked if you have an 'problems' with neighbours. failure to declare the noise etc may open you up to litigation. Just be cautious, it could lower the value of your property.

Good luck.

peterg1965

it will cost you a few thousand pounds to move house, Stamp Duty, Estate Agents, Solicitors, removals etc etc. This could amount to £4-5K, that eats up a large portion of your equity.

An option is to have a look at mortgages that allow you to borrow more than the property value, but be very aware of the risks and what you are getting into. I think that Northern Rock do a mortgage (called 'Together'), which enables you to borrow up to 125% of the property value. 95% secured on the house and 30% as an unsecured credit facility (up to a max of £30K), this may suit and there may be other lenders that do similar products. In this case, for a £160,000 house the mortgage would be £152,000 and you would have an unsecured credit facility of £30K. You wouldnt have to use all of this. If you sold your current house for £140K you would have equity of £8K, take off £5K for moving, leaving £3K you would need a deposit of £8K on the new house, so you would have to borrow 5K from the unsecured facility. Alternatively, you could take a 95% mortgage from any provider and borrow the additional money on a competitive unsecured basis.

How you go about it depends on your finances, circumstances and your ability to afford the additional mortgage/loan.

Also when you sell your current house you will need to be very honest with your solicitor when it comes to answering questions about your current property. You will be asked if you have an 'problems' with neighbours. failure to declare the noise etc may open you up to litigation. Just be cautious, it could lower the value of your property.

Good luck.

burns

thanks for your reply,

I'm slightly confused to how the mortgage lenders calculate the 5% when you add to your current mortgage? For example if I borrow an extra 20k, 5% of that is only £1000, do they recalculate the mortage in total?

peterg1965

Do you mean the 5% deposit? Look at it like this, when you sell your current house effectively it means that the current mortage is paid off. You then take out a new mortgage to pay for your new home, the 5% deposit required, assming you go for a 95% mortgage, is 5% of the purchase price of the new property. So for a £160K the 5% deposit = £8,000.

I am no expert on the quality of service or products available from HSBC but remember they will be keen to keep you as a customer and they may have products that are not suitable to you. They are also a bank not a building society so in my opinion they are not as competitive as the likes of some of the big Building Societies or ex Building Societies. My advice is find yourself a good mortgage advisor and discuss your options with him/her. If you are confident about finances then use the internet to look at what is available and then talk to individual lenders over the telephone.