Moving Mortgage to a new property

Magnum26

First off sorry if this is in the wrong section, first time post!

OK here goes... I have a mortgage of 70k, my house was bought for 170k, my parents put up the 100k deposit.

I'm looking in the next year to move houses and to add my soon to be wife to the mortgage. I've been looking at houses at around 150k so this would mean increasing the mortgage.

I understand that when I sell the house they will offer me a value, for arguments sake lets say 165k, how would it all work? I'll give my parents back the 100k leaving me with 65k to....pay off my mortgage? Does that then 5k mortgage get added to a new joint mortgage of 150k, making it 155k?

Any help appreciated.

kingstreet

When you sell the property, the solicitor repays the existing mortgage.

Whatever equity you had in the property is then yours to do with what you will. If you wish to repay your parents, other credit etc you do that.

The remainder would then become your deposit for the next property, together with any savings you might wish to put in. The purchase price of the new property, less the equity/savings for your deposit, equals the amount for the new joint mortgage you need for the purchase with your partner.

If the current mortgage is "portable" you may be able to move the rate from it to the first part of the new one, if you wish to stay with the current lender for your next mortgage.

Remember, you need to meet the lender's current income, loan to value and affordability criteria. Porting does not confer a right to a new mortgage or a guarantee that a lender will wish to lend to you.

kingstreet

Using your example, if you sell for £165k, once your parents are repaid and the existing mortgage repaid, you'll have nothing left for a deposit.

In fact, you'll have enough to repay the mortgage but not quite enough to repay your parents.

Typhoon2000

If you sell your house for 165k, after repaying your mortgage of £70k you will be left with 95k to repay you parents. If you going to be repaying your parents with the proceeds, you will need to apply for a new mortgage for your new property in the usual way.