Can we get a new mortgage and move?

Digby6667

Hi all,

I need a bit of advice, I bought my house a few years ago on 110% or something mortgage (I wish I hadn't but there you go!) and am wondering whether I have any hope right now if I wanted to get a new mortgage and move.

State of play is as follows

Mortgage value: £168k
Unsecured loan value: £16k
Credit card debt: £9k

House value now circa £190 - 195k
Combined salaries: £63k

Now I get that selling the house would put us back essentially debt free but need somewhere to live and don't want to jump off the ladder!

As far as I'm aware we do not need to pay back the unsecured loan when we sell although would expect an increase in interest rate, but how much will this affect the amount we can borrow on a new mortgage?

Deposit for the new house would need to come from the sale of the existing house.

Are we stuck? Grateful for any insight

Foxy-Stoat_3

You will want at least 10% deposit for the next house with a mortgage LTV of 90% assuming your credit history is all good. You will need additional cash for the legals and fees for the new mortgage and stamp duty.

Assuming your not wanting to buy a house that's more than £200,000 then your debt shouldn't be an issue as your combined earnings look ok. Speak to your current lender and a whole of market broker to discuss your options.

Thrugelmir

At a high LTV the unsecured debt will be an issue. Is your debt with NRAM? If so may be worth spending a period of time repaying the debt prior to moving. As the increase in interest rate is significant.

Dave_Ham

I think it is definitely worthwhile having a chat with a broker, as I would suggest from the information provided there will be a solution based upon your needs.

Lender selection will be critical and likely to involve not paying off the unsecured component, which will lead to a higher interest unsecured loan..

Shooting from the hip a bit, so definitely have a formal conversation with a broker to appropriately assess options.

Best of luck

Digby6667

Thanks guys.

The mortgage is with NRAM - I've heard that the interest rate would go up to 12%, although haven't enquired myself.

Good to know that there could possibly be a solution right now.

We don't have a pressing need to move necessarily, and I think we would need to purchase a house at around £220k to make it worthwhile moving.

So I guess the best plan of attack would be to spend maybe a year overpaying as much as poss and then see what can be done.

Might still have a chat with a broker soon though out of curiosity.