Transferring my current mortgage to a new property

Katie222

Help, I need some advice but have never done this.

I have a property worth 180K with a 109K mortgage on, can I transfer the mortgage to a new property worth 130K and pay down the extra 21K myself.

I know I have to check if a portable one.

If I am able to do this will I keel to the 180K I sell the house for.
Sounds crazy but I am confused and want to check, as then in theory I would be able to reduce the mortgage to 40K and have an easier life-is this possible.

Thrugelmir

You'll need to apply for a new mortgage if you purchase another property.

The term "port" relates to the terms and conditions on your existing mortgage i.e. interest rate. Not necessarily the amount of the mortgage.

Your application will need to meet your lenders current lending criteria along with the product you are applying to transfer. So the LTV may be a factor.

Katie222

Confused as in other posts I can see you can transfer your mortgage to another property, although the do undervalue the property now.

It does say this can be easily done, as long as not fixed or tied in which I am not. So very confused.

Thanks for responding.

Katie222

Just re-read the other posts and I think official it is a new mortage with the same terms, just to clarify that would mean if I move I would only end up with equity (after moving fees etc) not the 180K. I was hoping to move the mortgage 109K and get the 180K of the sale of my house for myself. I think I ahve this all wrong can someone clarify for me, will be calling them this weekend,

grey_gym_sock

you can't keep the full 180k. if you were selling and not buying another house, you could keep c. 71k, i.e. what's left over after paying off the mortgage. if you're buying another house, you can't keep that much, because you need some for the deposit for the new house.

buying a cheaper house means that you can either have a smaller mortgage, or take some cash out, or a bit of both.

if you want to minimize the mortgage, and not take any cash out, you'd have a 71k deposit, so a mortgage of only 59k.

or if you were able to keep the mortgage at 109k, you could take out 50k cash. but that would give you a much higher LTV (84% instead of 61%), so you might have to go onto a more expensive mortgage rate (or miss the chance to get a lower rate), or the mortgage lender might just say no.

or you could go somewhere between those 2 extremes, e.g. have a smaller mortgage of 84k and take out 25k cash.

whatever size the new mortgage is, the lender will have to agree it's affordable on your current income.

also note i've ignored the costs of moving, so that needs to be added in, unless you have money set aside for it.

holly_hobby

In a sentence, porting relates solely to the mortgage PRODUCT, and not the underlying borrowings (but many peeps do think it relates to the mge itself - so you're not on your own in the assumption).

It should also be noted that "Porting" is also at the complete discrection of the lender and terms of the product and the actual LTV on the new property , so they can refuse the request, and as stated by T., you are fully assessed on the whole amount of borrowings for your new home.

to explain further .... and just conjured up figs used for the purpose of the example, but should give you an idea on how it works ...

- I am buying a house for 175k - and want a 130k mge

- I currently have a 100k mge, on a rate of 1% until 12.02.2015 - which I request to port to my new mge and property

- the lender agrees to loan me the 130k requested, following their status and financial assessments on the entire 130k reqd on mge to pch the property, and also agree to permit the porting of my current rate of 1% until 12.02.2015.

- which means of the new 130k mge, 100k will be at my current rate of 1% which will expire on 12.02.2015 (and when it reverts to the lenders SVR/BMR)

- with the residual 30k placed on a product chosen from their current portfolio - so I will in effect have 2 mortgage products running alongside each other on my mge borrowings on my new home.

Does this make it any easier to understand ? Hope so, sometimes having it laid out like this can illustrate it far easier than just text.

Hope this helps explain what porting relates to and how it works

Holly x

vectistim

If you are wanting to port your rate from one property to another you will need to check your original documentation, as you may have loan to value LTV issues. Currently you have 109 vs 180 = 61% LTV[1] 109 on 130 gives 84% LTV and there may be a limit on the LTV on your currently product (possibly at 75%)
Products are often tiered so if you have a small deposit you have to pay a higher rate.

[1] Your original loan to value will be more important - ie this ratio at the time of purchase.