Porting a mortgage / 2 mortgages

andrewm1981

Hi,

Hope someone can help me.

I have had a mortgage on 50% of a property (my half is worth 125,000). Ive had the mortgage for 7 years, 10 left to go.Its with A&L. So i guess ive paid off around 40,000 of the mortgage. This is on a great 0.5% above base tracker.

Anyway, i want to sell, and get a 2 bed flat. Probably cost around 250,000. Do i get two mortgages?

My income is around 40K, plus 10K O/T. no debts/loans. experian score is perfect. 20K in savings that can be deposit on 2nd mortgage

What would be the best route to take, and do you think I'll achieve a mortage total of around 250K?

Thanks in advance

Andrew

kingstreet

You can't have a mortgage on half a property. Lenders only lend on the security of a property as a whole.

You sell the current property and repay the current mortgage.

You apply for a new mortgage on the new property with the same lender. Subject to criteria, affordabiity and valuation, the lender agrees to lend you what you need. The lender allows you to transfer the rate from your old mortgage to the first part of your new one - upto the amount you are paying off.

The additional money you are borrowing will be offered on one of the lender's new/current products.

You will have one mortgage, split into two sub-accounts to keep the two rates separate.

Based on the figures given, £40k + 50% of OT, 4x income would give a mortgage of £180k. Any credit commitments, dependents and/or maintenance costs would reduce that.

andrewm1981

The original mortgage was on 50% of the property, with my mum. she owned her half outright, and when i took out the mortgage, she got her 125K cash.

Thanks for your info on the 2 accounts, I had no idea how that worked.

Can the £40k that ive paid off already be used as some sort of deposit? or at least taken out of the equation?

ie: £40K+50% OT x 4 = £180K, plus 20K saved(surely), plus 40K thats paid off already!?

Thanks for your help so far

kingstreet

You sell the property and repay the mortgage. That's your equity in your hand. The equity you have reflects the amount of the mortgage you've paid off.

You take that equity, add in any savings you wish to and apply for a mortgage so the total you have is then equal to the purchase price of the property you wish to buy.