I have a question about selling house and how the money works to buy again I get all agents fees and everything we need to pay but to keep simple I will just ask simply
If I was to sell my property for 800,000 and re buy we have a 400,000 mortgage which if I keep a 400,000 mortgage on next property I can then buy for 800000 and still keep my 400,000 borrowed or I can pay back 200,000 and keep 200,000 mortgaged it is a portability loan so we don’t want to break the loan or pay whole lot of but if I payed back 200,000 what could I then buy next house for to have 200000 mortgaged I hope this makes sense I am just really confused and I probably have confused you all but after people who have done this please
Buying a house
Buying a house
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Money
3 Replies
I’m pretty sure you have to completely pay out the mortgage as it is secured on the house.
However given in your example you then have 400,000 to purchase the next house and are likely to be able to borrow another 400,000 so can buy a house for 800,000 possible more based on the 400,000 deposit (minus stamp duty)
If you need a mortgage for your next purchase you basically have to reapply for a loan, for tha amount you need to borrow. They will want to relook at your finances to make sure you can service the next loan.
We usually speak to our mortgage broker/ bank before we put the house on the market so we know what we can borrow for the next house.
When you’ve sold, you will pay out the entire first mortgage and take out a new mortgage for next house.
This is because a mortgage is a secured loan eg if you don’t pay the bank can take your house.
I find your post confusing, but I did check on portable loans & there's a lot of conditions. You'll still need to have a new property valued & it has to fit their lending criteria. If you wish to drop another $200k on the mortgage then talk to the bank as to if before or after is better & your loan allows this.
My best advice is to write down your questions & concerns, make an appointment with a broker at the bank & ask them to explain it all. You should NEVER embark on a financial transaction unless you understand the process. Every lender is different.
Don't rule out taking out a new mortgage with other banks. There's some excellent rates out there & shouldn't be ignored because you're comfy where you are. An independent broker can help & do the bulk of the work for you.