Porting mortgage - buy to let

tonis

Hi,

I currently owe £43k on my mortgage. We were looking at buying a new property and porting this mortgage across and borrowing a further top-up (approx £40k) which has been AIP.

We wanted to keep our current property, switch to buy-to-let and release equity from this for deposit and money to do new house up. We were looking at around borrowing further £50k - have DIP for this.

We are confused about the mortgage £43k that we currently have and wish to port. Do we have to pay this balance off with the equity we release from existing property? So we then simply port the rate across?

Hope this makes sense 😬

Lilla_D

Sounds like you've been busy with getting agreement/decision in principles for the two mortgages that you need, but the broker or the bank's adviser should have also clarified how the process works.

Yes, the new loan will replace the current loan, but it's not something you personally arrange. The solicitor acting for the remortgage and the solicitor acting for the purchase (if they are two separate solicitor firms) will make the necessary arrangements on your behalf and deal with the mortgage lenders regarding money transfers and Land Registry updates. When you change a lender for a property, the solicitor updates the Land Registry records accordingly.

Your role is to provide the necessary info and documents to the broker or the bank's advisor as necessary, not to take out new credit commitments, not to be late/miss any payments and generally be good with your finances while this all goes through. Everything else will be taken care of by the broker or the bank's advisor (dependent on whether you make your arrangements via a broker or directly) and the solicitor(s) involved.

getmore4less

porting the mortgage does not create any new money

The money was given to the first seller when you bought, you now owe the bank.

When you port you don't get any more money from the bank you need to find all the cash for the new place.

The actual chain is you give the bank back the money making the first property mortgage free, they then give it back to you for the new place you give the money to the seller.

kingstreet

Are you sure your current lender will permit a port from a remortgage? Many will only port from a sale.

The existing mortgage is repaid from the remortgage proceeds and the rate is transferred to the new mortgage on the new property at completion.