Porting and equity release

Derg35

Hi,

My family and I are looking to relocate to Scotland from England and due to the way things work up there we decided that selling here and moving in with relatives would be a good idea as it will mean that we are able to make an offer on a property up there straight away with no hassle. We have equity in our current property as prices have gone up considerably here over recent years which is good. I have found out that we are still able to port our current mortgage and as long as the gap between selling and buying is less than 6 months we will be reimbursed our early termination fees however we were hoping to use  some equity to clear  debts and we're just wondering how this would work if we were porting the mortgage.  Our knowledge/experience with these things is zero so thought we'd ask on here. We will at some point be talking to a local advisor but any info would be much appreciated. 

Thanks

Thrugelmir

You'd need to borrow further funds on top of your existing mortgage from your current lender (a seperate product) to fund the future purchase. 

Once the sale completes. The clock starts ticking. Six months isn't long. 

kingstreet

You are porting the terms to a new mortgage, not the mortgage itself.

The new mortgage can be the same size, smaller or larger depending on the purchase price of the property and your chosen "deposit" from the equity from your earlier sale. Once you have the funds from the sale of your previous property they cease to be equity and can be used for any purpose, but will leave you with a smaller deposit.

If your new mortgage is less than you repaid, you will receive a pro-rate refund of the ERC. If it's larger, you will take the extra borrowing on a new/current product leaving you with a mortgage made up of two or more sub-accounts reflecting the different amounts of borrowings at different times.