Newbie question on mortgaging

d.j.bowers

Hello,
Due to a change of job with lower salary, I am looking at moving (downsizing) house as well as being closer to my new work location, as an important cost cutting requirement.

I was a first time buyer for the current house so inexperienced with process of moving to new home.

My question is, If I downsize my house in a chain purchase, would it be possible (and how likely would a bank accept) for me to take out money from my current property to pay off debts/loan and use the remaining money as deposit with the new mortgage on the next house?

For example:

Current house 210k value, new house 150k, current mortgage remaining 110k and loan debt 18k.

Just I worry (but I am newbie to this) that the banks will just insist I use all the value from the first house for the 2nd home purchase and only other me a mortgage for the remainder of the outstanding difference.

Otherwise I guess the sure but more dangerous route is to sell first, clear debts and re-enter the property market again with whats left. Which I prefer not to do.

Thank You

Richard_Pia

You should be fine with this. Lenders won't insist that you use all the equity in your current property as a deposit for your new one. Depending on the lender however, your debts may still count against you for affordability, even if they are being cleared.