Equity in flat for moving fees?

jennielouises

My husband and I are moving house and will be porting our mortgage with Nationwide as we are still in a fixed product. Our DIP was for £221,500. We have sold our flat for £257,000 and have a current balance on our mortgage of £185,000. We were going to use some of the equity to pay for fees etc. as well as for some home improvements. This would leave us with a deposit of £65,000. However, my sister has just told me that when she moved, Nationwide wouldn't let her borrow more than the house is worth - makes sense but now I am confused. The DIP said they could lend us £221,500. The house is worth £283,000 so does than mean they are going to tell us we have to use the deposit of £72,000 and only lend us £211,000?

If my sister is right then that means we can't move but we did tell them we were going to use some of it for fees. I would be really annoyed as I have told them throughout that I want to do this.

I have an appointment on Friday to apply for the mortgage. My husband has had a pay rise since the DIP and I was going to find out if they would let us borrow a bit more and us use some more of the equity in our flat to do some improvements to the new house (a storm porch and updating the heating) but now my sister has got me worried that I've got it wrong. Please help a very confused person! :huh:

Theguywhovapes

Hi Jennie

I can’t see any reason why nationwide wouldn’t let you use some of the equity for fees. Your Dip allows you to borrow more than the different between the deposit and purchase price. So I think you will be ok

The only thing I can think with your sisters case is that, if your sister took her first mortgage out before April 2014 (pre MMR) new affordability since then may not have allowed her to borrow the same amount as is currently outstanding. In these cases lenders can apply discretion in the form of a transitional arrangement, meaning they can port the existing amount but no more.

Hope this makes sense

YHM

Jennie

Subject to a solid application that matches up with the DiP, you should be able to borrow upto the £221500. Therefore with a deposit of £65000, this should dictate a total borrow of £218000. This does mean you will need a top-up of circa £33000.

Main point from me, is just be mindful of your rate choice for the top-up. If you fix it, it will not be aligned to your existing mortgage product, and you may therefore put yourself in a position where in theory you always have ERCs if you want to remortgage elsewhere...I'm sure the trusty Nationwide adviser will point this out

jennielouises

YHM wrote: »

Jennie

Subject to a solid application that matches up with the DiP, you should be able to borrow upto the £221500. Therefore with a deposit of £65000, this should dictate a total borrow of £218000. This does mean you will need a top-up of circa £33000.

Main point from me, is just be mindful of your rate choice for the top-up. If you fix it, it will not be aligned to your existing mortgage product, and you may therefore put yourself in a position where in theory you always have ERCs if you want to remortgage elsewhere...I'm sure the trusty Nationwide adviser will point this out

Thanks but I think you misunderstood my question. I know how much I need to top up by. I have effectively £72,000 as a depositbut I want to use £10,000 of it for fees. Is that doable?

jennielouises

Theguywhovapes wrote: »

Hi Jennie

I can’t see any reason why nationwide wouldn’t let you use some of the equity for fees. Your Dip allows you to borrow more than the different between the deposit and purchase price. So I think you will be ok

The only thing I can think with your sisters case is that, if your sister took her first mortgage out before April 2014 (pre MMR) new affordability since then may not have allowed her to borrow the same amount as is currently outstanding. In these cases lenders can apply discretion in the form of a transitional arrangement, meaning they can port the existing amount but no more.

Hope this makes sense

Thanks. Yes that makes perfect sense and she moved in 2013 so that must be why

YHM

jennielouises wrote: »

Thanks but I think you misunderstood my question. I know how much I need to top up by. I have effectively £72,000 as a depositbut I want to use £10,000 of it for fees. Is that doable?

Yes. Sounds perfect