Accessing money on a mortgage

andy1314

Hi all,

Could you help, I currently have a mortgage with my brother on a house we live in together, bought because it was more viable than buying small flats separately. Currently we’re on a tracker rate that we started before the Bank of England cut the rates, so as far as mortgages go, it’s superb value.

I would like to move out and buy a house of my own with my partner, the value of my current house is £176k with £70k paid off so far, is there a way we can simply take £35k out of the amount that has been already paid and leave the remainder of £141k for my brother to pay?

I’m assuming if we could do this, there will be things the bank would require, a check that my brother could manage the repayments on his own being the most obvious. Also, would the low rate we’re currently on be rebased to a higher rate?

Thanks for your time, if you require more information I’ll post it, regards.

kingstreet

Are you leaving the ownership of the property and the current mortgage?

If you are, this process is a transfer of equity. He would need to ask the current lender if he can take over the current mortgage alone and ask for additional borrowing to buy you out, or to remortgage to a new lender, if better terms could be obtained elsewhere. The additional borrowing would be based on the lender's current products, if granted.

Once agreed, the matter is passed to a solicitor for the TofE to be finalised. The total cost would be in the region of £500 - £600.

andy1314

[FONT=&quot]Thanks for the quick reply, yes ideally a transfer of ownership to my brother, however, if it cost us the rate we’re currently on and the bank made more money out of him on his own, I’d rather just take the £35k out but leave my name on the property and keep the existing deal we have with the bank, is that possible, just withdraw the £35k out? Will the bank set up any obstacles?[/FONT]

kingstreet

Maybe. It depends on the lender.

You would then have to find a lender willing to accept the first property and mortgage in the background, as you'd need to be able to afford the payments on both mortgages.

andy1314

I’m not too worried about finding a lender to accept me on two mortgages, between myself and partner, I'm comfortable we’re well paid with enough to cover “both” mortgages, I was just uncertain about freeing up the money tied up in my current property. Thanks again for your time.

Thrugelmir

You may struggle to release equity to use as a deposit on another property.

andy1314

Is it easy/easier to just release the funds in the first place regardless of what it is used for?

Thrugelmir

Far harder.

Let_Us_See

A quick reminder on the subject of affordability. If you remain a joint holder of your current mortgage (assumed £106,000), you have to take the whole of this balance into account when assessing borrowing capacity on proposed purchase.

andy1314

OK, thanks for the help