Need help hopefully will make sense so we have a house in sydney we have a morgage on it for 400.000 and we can sell for 800.000 so once i pay the bank back we would have 400.000 right if we wanted to buy another house with only 200.000 morgage would that mean we would have a 600.000 deposit because we didnt want to pay the bank back the whole 400.000 of the money owed to the bank only wanted to pay back 200.000 i dont really understand that bit kept the figures rounded to make it easier please help me understand
6 Replies
Whenever you sell a house, the bank gets paid back automatically first.
You then pay on the next house the deposit (usually 20% so you don’t pay mortgage insurance) whatever extra you pay is upto you.
Best speaking with a broker or conveyancer if your still unclear
You would pay the bank back the whole 400000 but could take out another home loan for the amount you need for your new place.
Want doesn't come into this one. A mortgage is a loan against a property, if you default they take the property, hence it has to be yours. You will be required to pay out the entire balance.
I am not talking about defulting we have never defulted just wanting to sell and buy again
I'm not saying you're looking at defaulting, I'm saying a mortgage is a secured loan against a property. No-one is going to buy a house that they aren't getting clear titles to at point of purchase.
You have to pay out your loan, then start afresh with whatever you have leftover/saved up