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Borrow more on mortgage to buy new home
inkydolphin
Posts: 220 Forumite
Hi, I want to move house and for various (mainly health) reasons I really want to try and buy the new home first before selling the old one. I'm about £32k short at present. I have a remaining mortgage of about £70k on my current house, which is worth about £265k. Current mortgage deal ends in Dec this year.
It looks like I can borrow more on the current mortgage so I was thinking I could borrow an additional £33k to buy the new house then pay the whole mortgage back in full when I sell the current house. It seems it's not an excluded reason for borrowing more (excluded reasons seem to be borrowing for business purposes or borrowing for buy to let).
I realise it's not the cheapest way to do things but was wondering how it works. Are you essentially opening a second mortgage that runs alongside your current one but with a different term, or do they add the new amount on to the old one and it stays as one bigger mortgage? As the current deal ends in December, when that time comes (presuming the first house hasn't sold yet) would I need to switch whole amount to a new product or just the original mortgage amount?
Thanks in advance!
It looks like I can borrow more on the current mortgage so I was thinking I could borrow an additional £33k to buy the new house then pay the whole mortgage back in full when I sell the current house. It seems it's not an excluded reason for borrowing more (excluded reasons seem to be borrowing for business purposes or borrowing for buy to let).
I realise it's not the cheapest way to do things but was wondering how it works. Are you essentially opening a second mortgage that runs alongside your current one but with a different term, or do they add the new amount on to the old one and it stays as one bigger mortgage? As the current deal ends in December, when that time comes (presuming the first house hasn't sold yet) would I need to switch whole amount to a new product or just the original mortgage amount?
Thanks in advance!
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Comments
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It would normally be a second part with different dates, rate and terms.
When the deal ends on the first part, you would either move only that part onto a new product or you would pay whatever ERC was on the second part and move both together.
If you planned on moving both parts together (although you probably wouldn't in your circumstances) then you would choose a product for the second part now that had minimal or no ERC (like a tracker).
You normally wouldn't be able to move only the first part to a different lender so that would restrict your options.1 -
Don't forget you need to pay the additional 3% stamp duty and the claim it back when you sell your old house1
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@housebuyer143 Thanks - yes have factored that in.housebuyer143 said:Don't forget you need to pay the additional 3% stamp duty and the claim it back when you sell your old house0
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