Nationwide Porting

Jumex

My wife and I are at the very early stages of planning a house move, more planning anything at the moment more than anything, but I find it useful to know what the options are before we get too far down the road and then can't move or something like that..

I do have a hypothetical question, which of course is subject to lending criteria, affordability and mortgage products available at the time etc. But does anyone know the ins and outs of porting with Nationwide? How does borrowing more work?

In our situation:

Original House Purchase - £155k
Original Mortgage - £147.25k
Original LTV = 95%

Estimated Sale Price (For arguments sake) - £170k
Outstanding Mortgage (at time of completion) - £140k
New Mortgage required - £200k.

My understanding is that the additional £60k of borrowing needs to come from an existing nationwide product. What happens to the equity from the sale? Do we keen the hypothetical (real at the time of compltion) £30k?

Assuming the additional £60k mortgage is at 80% LTV we would require the following:

Equity for ported Mortgage = £140k x 5% = £7k
Deposit required for new mortgage = £60k x 20% = £12k

I just can't find anything on the Nationwide website!

TrickyDicky101

I believe your resultant total borrowing will be used to assess what rate you qualify for on the extended borrowing. Hence, if you carry across £30k of equity on a £230k purchase (realise I have ignored costs/fees) you have a 200/230 = 87% LTV. The additional £60k would thus probably be on a 90% product.

Jumex

TrickyDicky101 wrote: »

I believe your resultant total borrowing will be used to assess what rate you qualify for on the extended borrowing. Hence, if you carry across £30k of equity on a £230k purchase (realise I have ignored costs/fees) you have a 200/230 = 87% LTV. The additional £60k would thus probably be on a 90% product.

I thought you not only ported the value of the existing mortgage, but also the type of mortgage in my scenario there's still 2 years to go on my fix. So you'll end up with 2 mortgage products.

In my example:
Mortgage 1 (Exisiting product) - £140 @ 95%
Mortgage 2 (New Product) - £60k @ 80%

kingstreet

When you sell, your existing mortgage is repaid in full.

If you qualify for a new mortgage with your existing lender, you may be able to port the rate from the old mortgage to the new one, with any increased borrowing offered on one of the lender's current products at the time.

If the loan to value is between 85% and 90% based on the new mortgage amount divided by the new purchase price, the product for the increased borrowing will come from that LTV band, upto 90%.

You will have one mortgage, split across two sub accounts to represent the different amounts on the different rates.

You can have the remaining product over its remaining term plus the new product over its term and have the whole mortgage over a longer or shorter period.

kingstreet

So you need a £200k mortgage.

What's the new purchase price?

Jumex

kingstreet wrote: »

So you need a £200k mortgage.

What's the new purchase price?

It's all Hypothetical at the moment, we're probably not selling until the summer. I just wanted to get a feel for the process so I can make sure everything is in order before putting our house on the market.

kingstreet

Ok. If you have £30k equity and use savings to cover any fees/costs, let's say you buy for £230k with £200k mortgage.

That's a loan to value of 87%, so you'll port the rate from your old mortgage on the first £140k and take a product from the 85% to 90% range for the £60k increased borrowing.

if you've got two years left on the current product, take another two year product for the extra, then you can re-do both in two years' time.

Alternatively, if you have say one year left, take a penalty-free tracker on the extra, then you can re-do both in one year.