Moving Home and so confused over mortgages

CheeseToastie

Im currently looking to move home from my current house to a new build through part exchange with possibility of shared equity.

the home im in currently is worth around 78k.

The home im looking at is wirth 200k

When i first bought my home here it was all done through nothern rock, and was 100% mortgage.

Now im looking to do part exchange so the equity on this home would be what is used as a deposit on the next home but im totally off my head with confusion over the fact I had a 100% mortgage.

My mortgage with nothern rock as 100% was set up as mortgage and unsecured loan. meaning I owe 57k on the mortgage and 15k on the unsecured. How does this all work into a new mortgage.

e.g. If I sell up here and pay off the remaning mortgage on the home im in now do I still owe 15k unsecured loan or would this also need to be paid off when sale completed as was part of the mortgage package at the time?

Dave_Ham

Hi there,

You have 2 choices;

You can either settle both the unsecured and secured part and assuming there will be monies left over to put to your deposit for the new place

or

You can just settle the secured part of the mortgage and use the funds for the deposit. The unsecured part comes with you, but the rate does increase quite significantly so you will need to note that the new mortgage company recognise this is then affordable to you.

Hope this makes it a bit clearer, but do ask any questions as it can be very confusing...

CheeseToastie

Dave_Ham wrote: »

Hi there,

You have 2 choices;

You can either settle both the unsecured and secured part and assuming there will be monies left over to put to your deposit for the new place

or

You can just settle the secured part of the mortgage and use the funds for the deposit. The unsecured part comes with you, but the rate does increase quite significantly so you will need to note that the new mortgage company recognise this is then affordable to you.

Hope this makes it a bit clearer, but do ask any questions as it can be very confusing...

Thanks for the quick reply.

The first part wouldnt be ideal, as its part exchnage im being conservative and saying the builder would give approx. 73/75k which would be approx final settlement for secured and unsecured. Leaving no lump for a deposit.

I take it best part is to contact NRAM and find out what the increased payment on the unsecured would be? or Just nevermind moving until the unsecured is down at more managable level?

Dave_Ham

Makes perfect sense.

I think the rate jumps to about 15%, but not sure if it is set in stone or not..

Be interested how you get on..

If and when things get tighter, it will surprise you how much flexibility the developer will have on price. Typically they will increase the offer on yours rather than devalue their own development...

kingstreet

IIRC it's standard rate + 8%, or 12.79%.