Mortgage question....

sandyk01

Hi guys

This might sound like a really stupid question....

So we got our first mortgage 5 years back for £146k. Over the years we paid some of it off and it's now at £133k.

We are now selling and buying a new house. Porting the £133k and borrowing an additional £120k.

Mortgage offer says... they will give 133k and 120k for the new house which is what we need.

So my q... what happens to the 13k we've paid over the past 5 years on the first mortgage. We'll get that back right once our house is sold from the solicitors??

I feel Im being a bit stupid :rotfl:

Thanks Guys x

ACG

Presumably the equity in the house you are selling is enough to bridge the gap between £253k (£133k + £120K) and the actual purchase price? Anything over and above that difference (if anything) will get paid to your account.

enthusiasticsaver

The £13k is part of the equity in your house. What are you selling for and how much is the new property?

sandyk01

So to be exact.....

We brought current house for 196k. We put 50k down and got mortgage for 146k.

We got a letter 2 months back saying there was approx 133k left (and so we paid 13k)

Now selling, new house is 381k. The 133k from above is being ported and we're borrowing an additional 123k to make up 256k new mortgage.

So adding the 50k we put in originally and selling this house profit of 73k total 123k.

So 123k(profit) plus 133k (original mortgage) and 123k (New motgage) for the 381k house.

Am I right in saying theres the original approx 13k we paid off returning to us or am I just not calculating right?

enthusiasticsaver

The £13k is part of the £73k profit.

Original house price is £196k less deposit of £50k so a mortgage of £146k

£13k repaid off the mortgage leaving £133k to pay which is being ported to new property.

Presumably you are selling existing property for £196k plus £73k? That makes it £269k? Subtract the mortgage of £133k and the deposit to go to the new property is £136k.

New property is £381k less deposit of £136k is £245k so I am not sure why you need a £256k mortgage unless you are not selling for £269k?

Thrugelmir

What's the agreed selling price of your existing property?

sandyk01

I am really confused now...... I think i need to call them tomorrow!

The mortgage offer is for 256k.... does that mean theres a spare 11k floating about?!

sandyk01

We are selling for 269k and buying at 381k.

We originally brought for 196k so 73k profit.

enthusiasticsaver

It is really quite irrelevant to look at it from the way you have been.

The crunch questions are how much are you selling your existing property now Answer £269k. (Ignore what you paid when you bought it)

How much is your existing mortgage Answer £133k

Deposit for new property is sale price less mortgage so £136k

Purchase price for new property is £381 less the deposit of £136k so as I said the new mortgage needs to be £245k.

If you have applied for £256k mortgage your solicitor will assume you wish to use £11k of your deposit towards something else and that will be spare and returned to you after completion less costs of course. Did you apply for extra to cover stamp duty and costs?

enthusiasticsaver

Sorry I have just read your OP again and note the new mortgage will be £253k not £256k so there will be a spare £8k not £11k.

sandyk01

Yes so the extra 11k would be used for stamp duty. So thatll go to the solicitor and assume they will just keep it for that.

phew- just been panicking for the past hour!