downsizing the house

walker1627

Hi, hope someone here can help. My husband and I have a joint halifax mortgage with about £113,000 on it. The property is probably only worth £120,000 now. Halifax' system however values the house at much less giving us an LTV of 105%

I am looking to move this mortgage onto a cheaper property (£90,000 ish) If we do make any equity, do we have to pay it off the mortgage or can we keep that money aside giving me a 100% LTV (still less the halifax currently believe we have)

Thanks in advance for any help.

Illberich

Are you asking if you can still owe Halifax £113,000 while only owning a house worth just £90,000? If so then they won't allow you to do that because they wouldn't get their money back if they had to repossess.

But if you are asking if they will allow you to have a £90,000 mortgage on a £90,000 house, I think it's pretty unlikely but the only way to find out for sure is to ask them directly.

Also, I've never had a mortgage with teh Halifax so I've never heard of them having a system that values properties differently to the market value - I'd be interested to hear how this works!

Thrugelmir

You'll need to clear your existing mortgage. Then apply for a new mortgage on the new property. The new mortgage will need to meet the Halifax's current lending underwriting criteria.

If at all possible start overpaying your current mortgage so as to increase your equity and make the move possible.

kingstreet

The Halifax indexed valuation system only impacts if you are trying to do a product transfer or raise additional borrowing.

If you are moving house, you need to sell the first property for a high enough amount you can repay the mortgage, unless you have savings you can use to repay any negative equity.

You then need a deposit to purchase a new property.

You cannot transfer a mortgage from one property to another. You may be able to transfer an old mortgage rate to a new mortgage if you qualify for one. This is known as portability.

CLAPTON

walker1627 wrote: »

Hi, hope someone here can help. My husband and I have a joint halifax mortgage with about £113,000 on it. The property is probably only worth £120,000 now. Halifax' system however values the house at much less giving us an LTV of 105%

I am looking to move this mortgage onto a cheaper property (£90,000 ish) If we do make any equity, do we have to pay it off the mortgage or can we keep that money aside giving me a 100% LTV (still less the halifax currently believe we have)

Thanks in advance for any help.

why do you want to do this?
by the time you add all the buying and selling costs you will have made virtually nothing

kingstreet

If you search the OP's earlier posts, they have other debt issues. TBH, having read them I'd be surprised, nay amazed, if they get another mortgage.

walker1627

thanks for responses, reason for wanting to sell is marriage break up

Have a 2 year fixed rate and was told I could move the mortgage to another property if we moved house, I can afford a £90,000 mortgage on my salary but kingstreet is correct, there is no way I would get a new mortgage with any lender. Not enough equity to cover costs and a deposit. Not sure what to do then.

kingstreet

All I can suggest is sell the property then rent somewhere until you can rebuild your credit profile and make yourself "mortgageable" again.

walker1627

kingstreet wrote: »

All I can suggest is sell the property then rent somewhere until you can rebuild your credit profile and make yourself "mortgageable" again.

Thats what I feared! problem is that rents are more than the mortgage would be and the properties just arent worth it, and as I have 2 young children, I really wanted something that was "ours". If paying the full rent on a house, by the time I could save a deposit the kids will have left home!!!

May have to try and stay put. TBH I earn £30,000 now so could at a push afford to stay here on my own, Would probably have to leave husband on the mortgage tho eh?? was just looking for a clean break and a lower monthly payment.

Thrugelmir

walker1627 wrote: »

May have to try and stay put. TBH I earn £30,000 now so could at a push afford to stay here on my own, Would probably have to leave husband on the mortgage tho eh?? was just looking for a clean break and a lower monthly payment.

Consult a solicitor. As the welfare of the children is the overriding factor when it comes to the family home in divorce settlements. .