Mortgage porting to a lower value house

JasmineP

I currently have a mortgage of £149000 (paying bk interest only) and my house is on the market and has been valued at £174950.
The property i wish to 'port' my mortgage to is only £170k. As i have nearly £26k equity sat in my current property how does porting work????
Can it be as easy as swopping the address on the paperwork and getting the remaining equity bk into my bank??
Please say its that easy because im really confussed.com.
Dave

TwelfthMan

When you move house, you are redeeming one mortgage and opening a new account on the new property. Under normal circumstances, if you are tied into a mortgage product for a period of time, many contain ERCs which are payable if you redeem the mortgage or exceed the lender's stated overpayments allowance.

Lender's that allow "Portability" are allowing you to redeem the mortgage without having to pay the ERCs on the condition that you continue with the same mortgage product on the new property.

If for example you are moving to a larger property, the lender might let you take the existing £149k mortgage on the current deal to the new house. Any extra borrowing will normally go on whatever house purchase product rates they have available at the time or SVR depending on their criteria.

If you are moving to a smaller house and plan to pay off some of the loan, ensure you are not reducing the loan by more than the overpayment limit of the product. In your case, the purchase price is similar to the selling price so that shouldn't be an issue for you.

JasmineP

AHH i think i get you.
Thank you that makes it clearer.
Cheers mate:beer:

dwsjarcmcd

But it's not quite as easy as swopping addresses on a piece of paper. You will still need to go through an full application process and be underwitten and approved, nuch as you would for a normal mortgage.

David

loveandlight

Surely the equity would only be that amount if she finds a buyer who is willing to pay full asking price? What would happen to the deposit on the new property though if she isn't able to get full asking price for the property?
Wouldn't she then have a shortfall on the mortgage or less equity to put down on the new property?
I'm not being unkind, I'm curious because I am in a similar situation.