iam confused... please help....

james3333

i have a mortgage on my house, i still owe £85,000 ( this is fixed at 5.25% for three years) house is worth £140,000 So i have £55,000 'cash' here.
now, i want to move house and the new house is £200,000.

do i take the £55,000 off the £200,000 so i will be mortgaging £145,000? ( at about 6.25% as the rate has now gone up)
and if this is correct, what happens with the £85,000 i still owe on my house??????

basically i need to know roughly how much its going to cost me each month before i pout in an offer....

HELP!!!......

herbiesjp

When do the 3 years of teh fixed rate expire?

That £55k equity will have to go towards selling and buying fees i.e. solicitors, stamp duty, estate agents, mortgage, removals etc

But in effect yes, the equity you have will reduce the mortgage you will otherwise have to take out

If you are ties in to your current deal, you may well want to ask your current lender if the deal can be ported to a new property, and if the can lend the extra money needed. You would do this in order to avoid paying Early repayment charges to your current lender.

So £85 will be at your current rate, and the balance will be at what they offer you today. Try and make sure that any extra funds, and tie-ins they may have, expire as near as possible to the fixed rate you are on. That way it allows you greater flexibility to move away and re-mortgage(if need be) without incurring any penalties

james3333

THANKS for the reply, but iam afraid iam still none the wiser.....
is it..... £200,000k - £55,000 = £145,000

so, i have to borrow £145,000 @ 6.25%(ish) = £890 per month(ish)
AND
£85,000 @ 5.25% (still 2years left on the 3 years fixed deal)= £470 per month

this CANT BE CORRECT, i would be paying out nearly £1500 per month!!!!!

OR......

200k - 55=145 -85k=£60,000 to borrow at the new 6.25%
and the 85k that i have deducted there carries on at 5.25%

so i will have £60k @ £300(ish) and 85k @ £530(which is what i pay at the moment)

jesus...confused....

herbiesjp

No you borrow £85k at 5.25%

You then borrow (£145k-85k) £60k at 6.25%

james3333

brilliant, thanks for that mate!:money::money:

makes perfect sense now!

DarT_2

Simplistically yes it is 220k - 55k = 145kIn this case you would only need 1 mortgage of 145k @ 6.25%The guy was suggesting leaving your existing of 85k at 5.25% and taking a separate mortgage at (200k-145k) ie 55k at 6.25% to match new house value.The second case was because of any penalties in end first mortgage early.

james3333

well, i did say to the halifax ( who i have the 85k mortgage with) that we would be wanting to move within the next few months and he said the deal we have just re-newed 3 years fixed @5.25% will be ok and have no fees.
so, i assume that it makes sense to borrow 60k @ 6.25% and leave the 85k @ 5.25%

correct?

herbiesjp

It should be, assuming they will agree the mortgage of £145k based on your income/circumstances.

Porting a mortgage, is treated in exactly the same way as a new mortgage - so a new application will be needed along with all supporting documentation i.e. payslips etc