Remortgaging to move house - have a couple of questions...

mummyof21985

Hi, I wonder if anyone could help me please?

We purchased our current house 3 years ago when we were both working full time and had no children. We bought it for £230k and had a mortgage for £180k.

Fast forward 3 years, we now have 2 children and I work part time. The house is now worth between £250k / £280k (dependent on how quick we want to sell it!) and we have a mortgage of £187k (as took out a bit extra to convert the garage). The main bulk of our mortgage is on a SVR of 2.85% (about £130k) and the remainder is on a fix of bout 3.99%. We are hopefully set to inherit between £100k / £150k in the next few months.

My question is, we would like to move house (upwards move) but are unsure how it will work its regards to the mortgage - would we be able to take our current mortgage with us regardless of me now working part time? As we are set to inherit a decent sum, that would go towards the deposit so that the LTV would hopefully not be as much, but we would be looking at circa £350k property and therefore would still need a similar actual mortgage amount to current.

It's all so very confusing so if anyone could enlighten me I would be very grateful!

Thanks in advance

ACG

Thats a hell of a lot of kids you have had! 2195!!! There must be a few twins in that lot :-P

Haha! Ive now just burst out laughing at 3 years ago you had none!

In order to port the mortgage you currently have you have to pass the lenders current affordability model. If not, then you would need to look to a new lender, but bare in mind you may have early repayment charges to pay with the part you are currently tied into.

kingstreet

A remortgage is a new mortgage from a new lender to repay the old mortgage on your current home, so that's not what you need.

A mortgage is repaid when you sell the property on which it is secured, so you can't take a mortgage from one property to another.

You may be able to "port" the rate from an old mortgage to a new one on a new property with the same lender, but first you have to qualify for it, satisfying the lender's current affordability and status requirements.

When your current property is sold, the equity after the mortgage is repaid is held by your solicitor and added to the new mortgage money to total the purchase price for your new home.

If there's been such a change in your circumstances that the amount you currently owe would not be considered affordable, you won't be able to borrow that on moving, let alone borrow more...

mummyof21985

Honestly, I may as well have that many kids, I'm going grey with 2!!

Thanks for your reply. We moved the current mortgage (the bit on SVR) from our old house to this one, and then added the extra on. I assume they would just do this again for the next house? Is there any way of calculating it myself as to whether my drop in salary would give us problems with this?

Thanks

kingstreet

You may have felt that's what happened, but it was just the rate that moved. The actual money was repaid and a new mortgage started.

Use your lender's online affordability calculator to establish what you will be able to borrow

mummyof21985

Thanks Kingstreet. So, will they not port over my existing mortgage to a new property, as we have never had any issue paying it with our change in circumstances? If not, Would they port over the same rate but at a lesser amount? And if so, how do I work out how much they would lend (or do I have to speak to them for my individual situation?)

Sorry for possible stupid questions, it gets quite confusing in my mind!

mummyof21985

Right, so jut did calculator on their website and it said we could borrow £100k (which is quite a big drop!!)

How does that work against the purchase price of a house (would we need to add a deposit of £250k) in order to purchase a house of £350k and if so, what does that make the LTV?

kingstreet

Yes.

£100k mortgage divided by £350K purchase price = 0.2857 or 28.57%