Advice needed. On selling two homes to buy one.

downsideup

Hi.

Me and my partner both own homes with mortgages. We have found a house that we want to buy that is valued at £285k , which is about £50k more than my partners home. And I have equity of about £50K in my own home.

As my partners mortgage rate is really good we are going to ask her lender if we can port her mortgage to the new home and sell mine to pay for the difference.

My partner is currently only doing part time work so we are living of my income.

So does anyone know if this is possible?

And has anyone had any experience in doing this or something similar and have any advice.

Thanks

kingstreet

You first need to make a mortgage application to her current lender, presumably in joint names, to see if they wish to lend to you. Once you do that and are accepted, you can then port the rate from her current mortgage to the new one, taking any additional borrowing on one of the lender's current products for homebuyers.

The lender underwrites the mortgage application as it would any other. If it is happy to lend to you both, porting should be a straightforward process.

Presumably, you are going to have to find a buyer for both properties before you can apply?

Thrugelmir

downsideup wrote: »

And has anyone had any experience in doing this or something similar and have any advice.

Around 6 years sold two houses to buy one. Make life as easy as you can. Sell one property first. Then follow with the other.

Little point in looking at a joint purchase until both properties are sold.

Trying_to_be_good

We went from one rented and one mortgage-owned property to a single mortgaged property - I fully support Thrugelmir's suggestion that you sell yours first rather than trying to time two sales/moves in what could already be a difficult chain. We sold mine (I gave up my mortgage as Woolwich were so horrendous, even though it was a great rate) and put my furniture etc into storage (you don't want to clutter up the second property, but if your furniture suits it better and will help it sell, swap as much as you want) as it's well worth the extra costs of storage to make process easier.

Then it's only the sale of the second property that will form part of the chain, whilst your equity sits in a bank account somewhere.

Good luck!

downsideup

kingstreet wrote: »

You first need to make a mortgage application to her current lender, presumably in joint names, to see if they wish to lend to you. Once you do that and are accepted, you can then port the rate from her current mortgage to the new one, taking any additional borrowing on one of the lender's current products for homebuyers.

The lender underwrites the mortgage application as it would any other. If it is happy to lend to you both, porting should be a straightforward process.

Presumably, you are going to have to find a buyer for both properties before you can apply?

Yes we only found the house a few days ago. And was not really looking, but it is perfect for us.

We have called Mortgage Express and they have said they will contact us in 24 hours to discuss porting with us.

downsideup

Ok, good advice. I will see what mortgage Express says first and then look into selling my home.

At the moment my partner has a 2.5% interest only mortgage so it is only £350ish a month. And we don't want to be paying too much more than that if possible!

Trying_to_be_good

Lending rules have changed on interest only - have a look at what repayment would cost on her current deal and think about planning on that as your monthly outgoing.

downsideup

Yes I noticed the COOP have good rates apparently and we are both in the coop, if that helps.

Also got an appointment with a Which mortgage advisor on Friday.

latecomer

Definitely sell one first then the other. We did this 5-6 years ago and I definitely wouldn't have liked to try and coordinate 2 simultaneous sales.

Co-op have good rates including currently the best 5 year fixed if you have a 40% deposit.

downsideup

If I did sell my house, what should I do with the money. Put it in the bank ready to put it towards the new house. Or pay off some of my partners mortgage.

Also would I get taxed on the income for my property?

latecomer

What do you mean by "income for my property"? If its your main residence then you dont pay any tax on any gain you make on it when you sell. If its been let out then things change.

If you do sell then put the proceeds in the best instant access (or short notice) account you can find until you take out the joint mortgage for the house purchase.