Downsizing options

simplemick

Hi,

We are thinking of downsizing to reduce outgoings etc. Are we likely to get a mortgage with the affordability test if we already have a mortgage with larger payments that we are making?

Our house is currently valued at 240k with 170k mortgage. We are looking at a 170k house with 140k mortgage and 30k to pay off debts.

TIA.

*Edit* Reason for needing to reduce outgoings is other half being made redundant.

Mortgage_Adviser

The mortgage lender that you will approach for a new mortgage on a new property will assess you on your income/outgoings durimg the application time.
They will not be interested whatsoever about your old mortgage.

simplemick

Mortgage_Adviser wrote: »

The mortgage lender that you will approach for a new mortgage on a new property will assess you on your income/outgoings durimg the application time.
They will not be interested whatsoever about your old mortgage.

Even if they are the same lender? Surely wanting to reduce loan amount and repayments would be preferential to possibly defaulting on a higher amount.

Would they take into account debt that would be paid off with some of the equity, or would they want the debt clearing before the new mortgage was considered?

getmore4less

170/240 = 62.5LTV
110/170 = 64.7LTV
140/170 = 82.4LTV

That £30k consolidation takes you up the LTV and higher rates.


Anything else negative like DMP or CCJ

dimbo61

If you default on your mortgage then they take the property.
Can your partner find work ? even part time ?

Thrugelmir

Lenders have a duty of care towards borrowers. Downsizing is a valid reason for them to assist you. Worth speaking to your current lender.

simplemick

getmore4less wrote: »

170/240 = 62.5LTV
110/170 = 64.7LTV
140/170 = 82.4LTV

That £30k consolidation takes you up the LTV and higher rates.


Anything else negative like DMP or CCJ

Nothing, trying to avoid it ever getting that far. Outgoings have been consistent for last 6-7 years, incoming has just got a lot less.

OH has started college to train as a teacher but this is not instant, she is looking and applying for loads, nothing coming to fruition yet.

simplemick

dimbo61 wrote: »

If you default on your mortgage then they take the property.
Can your partner find work ? even part time ?

She's trying, got made redundant from police (civilian)and as stated above is at college to train as a teacher. She does placement 2 days and college on one night, leaving 5 days to work. It's not for lack of trying on her part.

Pixie5740

Selling and buying property costs money plus your LTV will be higher meaning a higher interest rate. What about other debt solutions that don't involve selling your home? Try the Step Change Debt Remedy Tool and/or visit the Debt Free Wannabe section of the forum.

https://m.stepchange.org/debt-remedy

mummytofour

Can you rent a room?