Do I have to use all my equity when moving?

doozeruk

Basically as the title says. Looking to move, roughly £40,000 equity in current property with £60,000 outstanding on mortgage, but owe £8000 in other debts. Can I use £8000 of that equity to pay off my debts or do I have to use the full £40,000 as a deposit on next property. The next property will have a mortgage of no more than £100,000. It's all just a bit confusing
Thanks

suse*

So you are buying a new house which is 100k, you have 40k equity when you sell your current place hopefully. So that will leave you 32k after bills, maybe 30k including costs for selling / buying. So what you have to look at is your LTV which is loan to value, so if the new house is 100k you have 30k (left after selling your place and bills) so that gives you a LTV of 60% when you look for mortage deals it is normally if you can get that below 75 or more you can get a better interst rate.

So there is no reason to stop you doing this assuming your credit / income can cover a mortgage the repayments with the new mmr checks. You could even keep a bit more of it if you needed but it is all the ltv % and where the cut off is for different compaines that makes the difference. So just have a play with some ltv calculators and look on some bank websites to see what difference that makes to the repayments / interest and deals and you can see what works best for you.

ACG

Yes.

Assuming the income stacks up etc.

doozeruk

Okay guys thanks very much, that's all iI need to know :T