ive seen a house help please re mortage

dawn_rose

Hiya we have seen a house for 120000 and have a house worth 85000 to sell. We currently owe 47500 on the current mortgage. How much will we need to borrow for the new mortgage? Will i continue to have to pay off the old mortgage at the same time as the new mortgage? can i pay the previous mortgage off with the proceeds of the sale complete and have a new mortgage set up on same day by solicitor for new property so therefore only paying one mortgage on one property?

thanks in advance from a very confused Dawn.

kingstreet

You sell the first property.

On completion day, your solicitor pays off the current mortgage. As part of the purchase process, you've applied for a new mortgage for the amount you need to purchase the new property.

On completion day, your solicitor gets the new mortgage money, adds it to your equity, what was left over from the sale of your current home after fees and mortgage repayment and pays the purchase monies over to the vendor's solicitor.

For example, you sell for £85,000 and your £47,500 mortgage is repaid, leaving your equity, £37,500 to cover your new property deposit and fees.

If you buy for £120k, you'll have about £35k after fees, which means you'd apply for a new mortgage of £85,000.

dawn_rose

thanks you when i rang the mortgage lender i am with i was told i would need to pay off the first mortgage before i sold my house or i could use a potable mortgage and keep existing fix rate till 2015 and pay two mortgages off.

I thought it was sell house pay off old mortgage with the proceeds pay fees and then put whatevers left down as deposit on new mortgage. Will i need to posibly use two different lenders do you think to achieve this?

EMac_2

If you are still on a fixed rate and tied in you probably want to speak to your current lender and ask if you can 'port' your mortgage rate over to the new property. This means you will avoid paying and Early Repayment Penalties which normally apply when your in a fixed rate mortgage. You will port the outstanding balance and rate and then take additional borrowing on a new rate to make up the difference. So you will have 1 mortgage in 2 parts on 1 property. Hope this makes sense. Best of luck

dawn_rose

do i have to port the mortgage tho as cant pay both off at once. I would prefer to pay the £1350 and redeem the mortgage then get a new lender for new mortgage if that is possible but i cant pay off the first mortgage until i sell the first house as i need the proceeds from the sale. does that sound feasable?

jackomdj

Either way you would end up with one mortgage.

Port your current mortgage ( which basically means you keep your current terms/rate on the value outstanding then depending on the terms of your current mortgage you top up to the value needed to buy your new house at those terms or at one of their current mortgage terms)

Or you change to a new mortgage where you will apply for the whole value needed, your solicitor will on completion of your purchase/sale get money from your sale and new mortgage, use these two pots of money to pay off your old mortgage and any redemption fees, pay for your new house and often take the balance of money you owe them (solicitor)

EMac_2

I think the lender rep you spoke to has got you a bit more confused. You maybe want to flag this up to their employer. You do know what your talking about,

'can i pay the previous mortgage off with the proceeds of the sale complete and have a new mortgage set up on same day by solicitor for new property so therefore only paying one mortgage on one property?'

YES

If you want to pay the penalty and take a new mortgage with a new lender then that's fine. You don't need to pay off the mortgage before you sell, you pay it off when you sell.

Like KS said, you will sell your property, repay whats owed on the original mortgage, collect the equity and put this towards the new purchase as your new deposit. Add this too the money from the new mortgage offer on the new property and that's it. You can sell and purchase on the same day but this can be pretty stressful and you will need an on the ball solicitor. Trust this helps.

kingstreet

dawn_rose wrote: »

thanks you when i rang the mortgage lender i am with i was told i would need to pay off the first mortgage before i sold my house or i could use a potable mortgage and keep existing fix rate till 2015 and pay two mortgages off.

Twaddle. You repay the mortgage from the proceeds of the sale on completion day.

You apply for a new mortgage on the new property. Porting is moving the rate from the old mortgage to a new one with a new lender. You can't move a mortgage from one property to another, only the rate/terms if you qualify for a new mortgage.

I thought it was sell house pay off old mortgage with the proceeds pay fees and then put whatevers left down as deposit on new mortgage. Will i need to posibly use two different lenders do you think to achieve this?

The first bit is exactly right. As I described above.

You don't use two lenders, unless you can get a better deal by taking your new mortgage with a new lender. Then your solicitor settle the mortgage balance which would include any early redemption penalties charged by your current lender for redeeming your current mortgage early.

Talk to a broker or two and a solicitor. It seems you need to be convinced by a few professionals, rather than an inexperienced call centre clone who works for your lender and who seems clueless.

dawn_rose

thanks everyone for your help its nice to know im not totally missing the point lol x

kingstreet

Far from it.

You were correct and being misled by someone probably poorly trained who should not be providing misleading information.

You'd be surprised by the number of people who work for lenders who think a mortgage is transferable. It isn't.

dawn_rose

i rang lender back and spoke to a loverly lady who booked me in for a call back to speak to a mortgage adviser tomorrow to discuss if theyll lend to us ect. feel im getting somewhere now.