Downsizing, Porting a Mortgage and Resultant Equity - Calculation help.

Lancs78

Hello Everyone. 

We currently have a Property valued at 250k with a 80k mortgage against it. We are looking to downsize and to port our mortgage across to a new property worth 150k

We are Struggling to get our head round the balance due back to us after the sale goes through (ignoring moving fees, etc) 

We sell our house for 250k 

We see a house we like for 150k 

We port our existing mortgage which is at 80k at the time of moving. 

SO.......

1. Is it a case of our house 250k less mortgage 80k leaving us with 170k equity. 

2. The new house is 150k so less the ported 80k mortgage we need 70k

3. We need 70k out of our equity (170k) to fund the downsize/move.

4. Balance back in our account = 100k 

5. Moneys owed to bank = still 80k 

kingstreet

Your current mortgage is repaid from the sale proceeds leaving your solicitor with £170k to put to the new purchase. If you have applied, your new mortgage money of £80,000 is added to that leaving your solicitor with £250,000. he purchases your new home for £150,000 and hands you the £100,000 residue, less fees and costs.

You arrange to port the rate from your old loan to the new one during the application process. You can port only the loan terms. You can't port a mortgage from one property to another as that is the security tying the loan to a particular property.

You have an £80,000 mortgage on the new property.

Lancs78

We are porting over our existing 80k mortgage from our existing property worth 250k over to our new property worth 150k

MWT

Lancs78 said:

We are porting over our existing 80k mortgage from our existing property worth 250k over to our new property worth 150k

No, you are porting the terms, not the mortgage, it is exactly as kingstreet described, you are getting a new mortgage for £80k with the terms of your old mortgage ported to it.

The answer remains the same though, you get £100k back in your account less fees etc.

kingstreet

£250,000 sale price less
£80,000 existing homeloan repaid from sale proceeds
_______

£170,000 residue plus
£80,000 new homeloan based on old homeloan terms
_______

£250,000 for purchase of new home less
£150,000 purchase price of new home
_______

£100,000 left for you less fees/costs.

As stated you cannot transfer a mortgage from one property to another. Your current loan is repaid and a new one started. The terms can be transferred from one loan to another.

If you replace the word mortgage with homeloan it makes more sense as a mortgage is security for a loan not the loan itself.