Mortgage idea that might work for people

B

Bessa

Registered User
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157
just an idea that worked in Ireland years ago. Say if someone wanted to sell a house to trade up etc. the purchaser could take over their mortgage arrangement, and any additional monies for the property would be agreed by the two parties. This could work again, and help many people in the process. As not all the Mortgages are for 100% out there.
 
How would that work? Say my house is now worth 200k with a 300k mortgage remaining on it. Who is going to pay off the extra 100k?
 
It would only work if the property was worth more than the mortgage.

I had never heard of it, and I don't see the point of it?

if a lender is not going to give you enough money to buy a house, they won't give you enough money to pay off someone else's mortgage.

Brendan
 
Presumably if the house was in negative equity the vendor would have to pay the purchaser to take over the debt, or lodge sufficient funds to bring the outstanding mortgage down to the value of the property.
 
j26 said:
Presumably if the house was in negative equity the vendor would have to pay the purchaser to take over the debt, or lodge sufficient funds to bring the outstanding mortgage down to the value of the property.
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If the vendor has the funds to do that then its easier to just pay off the mortgage directly to the bank. Why get complicated about it?
 
I'd agree, it wouldn't suit very many people, but taking over a tracker mortgage could be very attractive to a potential purchaser, as opposed to taking out a new SVR mortgage.
 
j26 said:
I'd agree, it wouldn't suit very many people, but taking over a tracker mortgage could be very attractive to a potential purchaser, as opposed to taking out a new SVR mortgage.
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I would seriously doubt that tracker mortgages are transferrable to another person.

Brendan
 

I have reread this a few times and I think you are suggesting the following

I find a house I want to buy. Instead of actually legally buying the house, I come to an informal arrangement with the owner that I move in and start paying the mortgage, leaving him as the legal owner of the house.

If so - why would I pay someone elses mortgage and have no legal ownership of the house. What possible benefit is there to me ?
 

Is this not just the same as renting the house?
 
Just say that A bought a house for 250,000 and has a Mortgage , but he now owes 200,000 on his house. He wants to trade up but cannot sell, so he finds a buyer who will take over his existing Mortgage of 200k and lets say he agrees to let his house go for 20k cash as well. He is now in a position to trade up, and repeat the same process to buy his bigger house. It would not work for people who are in negative equity, or those with 100% Mortgages.
 

The seller does not have the choice of "allowing a buyer to take over the mortgage". The mortgage is tied to the person.

Once you sell a house, legally, the mortgage has to be paid off and the buyer applies for their own mortgage. You cant buy a house that already has a mortgage.

It is simply not possible.
 
Even if this was possible to do I would say the chances of this scenario occuring are slim.

You are saying you need two people, one looking to sell and trade up, and the other looking to sell and trade down. What are the chances of these two liking each others houses\locations enough and all of this happening in the same period of time. It just looks like a rare occurance.
 
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