Property Swap - how does it work?

Looking for advice on a property swap deal and how it might unfold.

We are looking at the possibility of entering into a property exchange as a way around negative equity and large mortgage in order to move to a larger property.

A vendor in the market has a house and is interested in trading down. We are in an apartment and would like to trade up.

As an alternative to selling our place, waiting/saving for a while then applying for a large mortgage on a house, we are looking into a swap deal and pay the difference.

As an example, this is how I would see it working:

1. Value of vendor's house: 500K. Value of our Apt: 250K
2. Properties are exchanged per se
3. We pay balance (250K) to seller of house

How realistic is this? Is it a viable way around two separate buy and sell transactions. (where we would have to apply for a 90% LTV on the 500K as opposed to a mortgage to meet the 250K diff).

All advice welcome!

I'd be interested in any info on this also as I may need same advice. Thx

"(where we would have to apply for a 90% LTV on the 500K as opposed to a mortgage to meet the 250K diff)."

Is it not all the same difference?

You will be looking for a mortgage of 250K to buy a 500K house.

It is only a "property swap" - trendy term for two separate transactions that need to happen at the same time to work- if there is no lender involved. Stamp duty is still payable and you will each need a solicitor to act for you.

Once there is a lender involved, all the usual criteria apply and all negotiations need to be on the basis that you will have the funding for the difference.

So, you need to sell this idea to your lender.

mf