Can someone explain porting for dummies?

Dan-Dan

Hello

I just want to clarify something , I am thinking of moving home and will need to `port` my mortgage , I was under the impression that I would then owe the same amount on the new house as I did on the old , and because the house I want to buy is worth more than the old , I would need to borrow the extra , for arguments sake , say the old house is worth 205k and the new one 280k , so in my mind I am thinking I need to borrow an additional x amount of money to make up to the purchase price of the new house , but I think I read it that even porting a mortgage , closes the account on sale and opens a new one on purchase , meaning that the outstanding amount comes out of the sale price , meaning I only have the equity to put towards the new house , not the total sale price = much larger mortgage than I anticipated

Does this make sense , anyone fancy explaining for a simpleton ?


Thanks

betmunch

I'll have a crack at this, heres some simplified figures.




You have £100,000 on a house worth £150,000
You sell that house and buy another for £200,000
This means you require a mortgage of £150,000


Assuming your lender will lend you that amount you will have the original terms from the £100,000 mortgage replicated, and an additional £50,000 on the terms available when you apply for the new mortgage.


Does that help?

Dan-Dan

I think it might be better if i use real figures to my situation if thats OK

I owe 64,000 on a house worth 205
I sell that house and buy another worth 280
I thought that meant i needed an increased loan on the difference between 64k and the new purchase price , as i was porting the original mortgage

I am thinking this isnt correct the more i read

betmunch

No worries, with your figures you would have a £64,000 mortgage with a top up of £75,000 on the current product range.


Total mortgage of £139,000.


If you didn't come to that figure let me know what you thought it would be?

Dan-Dan

Thanks
I think i rather stupidly assumed porting meant i would owe 64k on the new house plus whatever extra was needed to meet purchase price of 280k

When i should have been starting from a figure of -64k

Blonde moment

betmunch

Dan-Dan wrote: »

Thanks
I think i rather stupidly assumed porting meant i would owe 64k on the new house plus whatever extra was needed to meet purchase price of 280k

When i should have been starting from a figure of -64k

Blonde moment

All sorted then

Thrugelmir

Porting only relates to the mortgage terms i.e. interest rate. You will will still need to apply for a new mortgage and meet the lenders current criteria for LTV, affordability etc etc.