Moving house and mortgage

niknok_2

Hello,

I am after a bit of advice. I will try and include as much info as I can.

My partner currently has a mortgaged house, the value of the house is approx 105k - 110k. The mortgage is 91k (19 years left) and this includes 2k of arrears which we have been paying off over the last year. In this months review Santander advised us we could consolidate this 2k back into the mortgage now that we had made more than 6 months of payments towards the arrears. These arrears were from when he was made redundant 2 years ago and then we started making payments back to Santander only for them to mess up our direct debit and between us and Santander got into a bit of a mess with repayments. We have now been on track for over a year.

Last month my partners Grandma died and now we are wanting to purchase her house. In the will he has been left 10k which he will get back on completion of the sale of the house. The house is valued approx 119k - 125k.

We want to use this 10k to pay off a debt we have to a family member who helped us out when got a new car.

We also have around 8k of other debts.

So my questions are as follows:

1. If we were to stay with Santander and say we got 14k equity back on our house would they pay us this before we sorted the new mortgage with them or would they just extend our current mortgage and give us the option to have some of the equity paid back to us?

2. Do you think they would be willing to extend the mortgage with our background?

3. How quick would the turn around be, roughly?

The plan is to have the 10k back on the sale of the house to pay off the family member, then put down a 5% mortgage on the new house and extend it back to 25 years. We will then use the remaining money of approx 8k to pay off the other debts. We will then discard of all credit cards so we dont use them again and will start to over pay on the new mortgage.

The reason for all of this is because we have a 6month old daughter and we want a bigger family home for her to grow up in.

Sorry for the really long post, and I hope it is understandable. I have never done anything like this before and this will be my first mortgage and i want us to have cleared our debts if we are moving house.

Foxy-Stoat_3

So you want to increase your LTV to 100%? What will happen when you move to the second home, rent out or sell?

Buy to Let normally want a 25% min deposit?

kingstreet

When the current property sells, the existing mortgage is repaid and whatever is left over is the owner/borrower's to do with as they wish.

With a record of arrears I suspect Santander will not lend again, even with a large deposit.

If there have been no recent arrears, other lenders may consider, but again the loan to value is going to determine your chances.

Would it be possible for you to simply state;-

- the purchase price of the property

- the mortgage amount needed?

Thanks.

niknok_2

We will be putting in an offer of 115k on the new house and will be putting down about 7k deposit. So mortgage amount will be in the region of 108k. when you buy a new house then you cant simply just make your mortgage bigger with the same company?

The house we are in at the moment will be going on at the market at minimum of 105k on the 6th of December.

EDIT: Also, I have never had a mortgage and so I have no arrears or history of but this will be a joint mortgage on the new house.

Seanymph

We tried to borrow additional money from our mortgage recently (well my husbands) and he couldn't 'extend' his current mortgage, that was a locked box so to speak - he had to take out another mortgage totally.

So I doubt you can 'transfer' your mortgage or make it more or anything like that.

It is much simpler - you will sell one house, repay the mortgage and take out another mortgage on the new house.

Leon_W

I would seriously get the finances sorted BEFORE putting your house on the market or doing anything. You could end up selling your house and have nowhere to go.

It is very unlikely that anyone will offer you a mortgage with a 5% deposit and historic arrears.

niknok_2

We will have somewhere to go because the house is currently in my partners dads name so he wouldnt see us out on the street. Plus our finances wont be sorted until we buy the new house because the inheritance will be sorting them.

Its just all come around so quick and depending on how long it takes to sell our house depends how much we will have saved extra.

Foxy-Stoat_3

So in summary, you have a 83-87% LTV mortgage and you want to remortgage to a 83-88% LTV mortgage on a bigger property depending on the sale value for your current house.

You will need additional funds for fees and legals £1000-£1500.

The £10K in the Will isn't relevant because you will pay that to clear your family debt.

If you want to use £8,000 equity to clear your current debts you will increase your LTV to 90-95%. Not the best thing to do as it will increase the total money you will pay out over the full term and make you less likely to secure another mortgage.

Your better off getting a zero/low percent credit card and pay it down.

Foxy-Stoat_3

niknok wrote: »

We will have somewhere to go because the house is currently in my partners dads name so he wouldnt see us out on the street. Plus our finances wont be sorted until we buy the new house because the inheritance will be sorting them.

Its just all come around so quick and depending on how long it takes to sell our house depends how much we will have saved extra.

Is the mortgage on the current out in your Partners Dads name or joint? How much will the Dad need on the sale of the house?

niknok_2

The current mortgage on our house we live in now is in my partners name.

The house in the will is currently in his dads name and has no mortgage on it. He wants 119k for the house.

And yes we will be looking at LTV of between 90-95% all dependent on how much we get for our house.

Foxy-Stoat_3

I see, so you could sell your current house and move straight into the other house THEN get a mortgage on it.....at least you won't have to wait for the funds to clear before you will be given then keys !!

Offering £115K without EA fees should work out ok.

So you need to do an application with your current lender or a whole of market broker based on a 90-95% LTV joint mortgage, maybe speak to a broker first with your Credit Reports printed off and see what they say.