mortgage transfer to a cheaper property

nickcnsc

Here are the facts.
I have lived in the same house for 22 years.
Current mortgage £375k house value £400k.

I want to reduce the LTV by at least £100k by way of reducing the mortgage amount and buying a house for £2/250k in a cheaper area (I live in Ascot)using the same mortgage company.I do not wish to raise any capital from this.

I cannot get another mortgage due to being self employed (no accounts) and credit record being awful.
Can it be done??

JimmyTheWig

nickcnsc wrote: »

I cannot get another mortgage

The mortgage company will only allow you to port your mortgage if you would have qualified for the mortgage as a new customer.
Even though you'd be keeping the same terms (interest rate, etc) it would, in effect, be a new mortgage.

If you don't qualify for a new mortgage then you can't take your current mortgage to a new property.

Thrugelmir

Is the debt you are looking to clear personal or business related?

holly_hobby

Just to be super clear ... you port the mortgage product (fixed, discount, etc) NOT the mortgage borrowings themselves.

Therefore, if you move house that will be a NEW mortgage and a NEW mortgage application with full status checks as per any new borrower would expect (whether you choose to remain with your current lender or seek an alternative provider) - and regardless as to if your current lender permits you to retain your current mge product as part of the application.

As a note, if you are self employed and seemingly have no accounts (?), I presume that you do have SA302s (ie proof of income submitted to HMRC for tax, which I would hope is being paid !?). If so your SA302s, are permitted and indeed requested by lenders as verified proof of income for SE indviduals.

Of course any adverse you have will be an issue depending on the type (default, CCJ, etc) , number of accounts and sums involved and how recent the adverse registration(s) are. (as a side note the adverse will fall off your credit record followingm their 6th anniversary of recording - however any charging order (CO) registered by the courts as a result of non-satisfaction of a CCJ, will not disappear until repaid from house sale proceeds (whenever that occurs).

Your best bet would be to sell and downgrade, purchasing for cash (whether you would also wish/feel responsible to repay your defaulted creditors with your release of capital (if they don't have secured COs), would of course be a matter for your judgement).

Hope this helps

Holly

kingstreet

If you only have £25k equity in the current property, how is that going to reduce the mortgage by £100k?

Are you going to put some savings into the pot?

Otherwise you have £375k on £400k, or 93.75%. If you buy for £250k and borrow £225k, that's 90%.

A LTV reduction of 3.75% isn't much for a lender to get excited about TBH.