Increase Mortgage, (even just in theory)

cminion

Hi

I am a young home owner looking at purchasing a bigger property.

We expect to to walk away from our current sale to get a 10% deposit on our new property.

We also currently have a tracker (0,5% above base rate) mortgage.

Is it possible to keep our mortgage (HSBC) for our new property and extend it to the amount needed for our new property. Probably doubling what we have left. Is this common practise? The bank will comfortably let me borrow enough for the mortgage at a high rate according to their website

I easily fit into the requirements for a 30years mortgage.

If this is not possible what is the best thing to do?

kingstreet

You need to approach your lender for a new mortgage.

If accepted, you may be able to port the rate from the old mortgage on completion day when your old mortgage is repaid. The additional money you are borrowing will be offered on one of the lender's current products.

Don't forget, this is a new application and the criteria, loan to value and affordability have changed in the last few years. Having a mortgage with a lender isn't necessarily a guarantee of a new one.

cminion

Thanks for the reply.

On the new product how is the ltv worked out?

Is it on the difference or just the total capital I have?

Dave_Ham

It will be on the total mortgage amount (ltv) although they may split the products as Kingstreet rightly says.

You really need to speak with them though as they will credit check, income etc. and they will obviously have an inherent reluctance to advance you more monies as they will be keener to see you using another lender due to incredibly competitive tracker with them

Good luck

JimmyTheWig

As has been said, the best you can get would be to keep the existing amount at its current rate and the rest as a second mortgage. You can only, I believe, get this second mortgage from your existing lender.

In terms of LTV it will be the whole borrowing. E.g.
Current mortgage £50k
New mortgage £40k
House value £100k
LTV = 90%

cminion

Thanks for the help everyone, time to finally find time to talk to the bank now someone wants to buy our flat