As above, I'm trading up, but depending on price level of the new property I don't necessarily need to sell my old one (small mortgage outstanding). As it stands I've made a mortgage application and have agreement in principal on the basis that I sell my own, but it's now looking like I can afford to buy the new house with a combo of new mortgage (circa 50% LTV) and savings without selling. Am I absolutely required to sell my old PPR in order to meet the new mortgage requirements? Or will the bank give a hoot once I can pay the balance myself? Thanks!
Trade-up mortgage approval but am I required to sell my old PPR?
- Thread starter MelF
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Brendan Burgess
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If this particular bank has given approval subject to your selling your own home, then you must do that or get them to issue a new offer.
But if you want to hold onto your old home, then get mortgage approval from a few lenders. One bank might require you to sell, while another might be happy to give you more money.
Brendan
But if you want to hold onto your old home, then get mortgage approval from a few lenders. One bank might require you to sell, while another might be happy to give you more money.
Brendan
Brendan Burgess
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I wonder would it simplify things if cleared your existing mortgage?
Against that if you hold onto your cash, you might get a lower rate due a lower LTV.
Brendan
Brendan Burgess
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Hi Paul
As it's a small mortgage, he probably doesn't need to worry about the rate being increased to a BTL rate.
Brendan
As it's a small mortgage, he probably doesn't need to worry about the rate being increased to a BTL rate.
Brendan
I could do that, but the property I have my eye on also needs quite a bit of renovation, so the plan would be to use combo of new mortgage and savings to buy and renovate while remaining in my current property and then selling down the line. But I'm not sure if the lender would insist that I sell and buy at the same time, hence my query. I suppose I'm trying to figure out if I need to 'prove' I've sold mine in order to draw down and complete on the new property, or is it much of a muchness from their POV as long as I have the funds to buy it anyway?
Yes, it's actually already on a BTL interest only tracker +.05 so I've no worries on that score as it's not costing much at all.
Many banks will offer a mortgage on a new property on the basis of renting out the existing one, including a percentage of potential income in the affordability calculations. Of course once the new mortgage is drawn down they will not follow through to check whether you have rented it out. They just care about repayments at that stage.
LTV doesn't appear to be an issue but what about your LTI? The lower the LTI the more options you would have.
I'm guessing your current offer is with your existing provider they might prefer to get rid of a tracker mortgage or just keep things simple from their side. A new lender may be more open to you keeping your current property.
I'm guessing your current offer is with your existing provider they might prefer to get rid of a tracker mortgage or just keep things simple from their side. A new lender may be more open to you keeping your current property.
Don't necessarily want to rent it out either, I'd more than likely sell it on when I've finished renovating the new one so rental income wouldn't really be a factor in the application. But I've never bought and sold at the same time before, so I've no idea if the bank needs proof that one house is indeed sold before drawdown can happen?
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No, a different lender - I've an old Danske Bank tracker now with Pepper Finance who seem to have no interest whatsoever in any new business.
As I mentioned, they don't check that you ever do, so you don't have to. I used that approach so I could close on new house and then later on sell the old one without having to get into the messing and risks associated with getting into a chain.
This is exactly what I'm hoping to do, thank you! So I'm probably better off at this stage letting the lender know I won't be selling after all but intend to make up the balance out of my own funds. Or maybe just say nothing in the event existing borrowing might reduce my baseline approval amount. I'm good for repayments on both since existing mortgage is basically only costing me a couple of hundred a month so no worries on that score.
It might be worthwhile talking to an independent broker who would best know how to present your case. Banks would likely prefer the story of keeping the existing house to rent it out as they will assume there will be an income to cover costs.
If there's a risk of you failing the affordability or loan to income limits then saying you intend to rent it out might be the best course of action and that will mean they are willing to give you more.