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Buying a house worth less than my current mortgage - advice pls

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My house is on the market for £109,950, but I'm willing to accept quite a bit less should I get an offer. My mortgage is currently at £89k and I've seen houses for sale in my preferrred area for £80-90k. I'd love to lower my mortgage and subsequently, the monthly payments - if I were to sell mine for say £100k, would I be able to buy one for say £85k? I know that I'd need a certian LTV ratio, so would buying a property that's cheaper than where my currently mortgage is be possible? Or would I have to buy a more expensive property purely to keep my LTV ratio high?

 

Hope this makes sense, any advice appreciated!

 

A x

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If you sold for 100k and had an existing mortgage of £89k you have 11k remaining.

If you use this as a deposit on an £85k house you are looking at a LTV of 87.5%.

Due to current market conditions, many lenders will only offer mortgages with a LTV of 70% and lower and so you will need to a) provide a bigger deposit or b) buy a cheaper house.

You need to keep your LTV ratio as low as possible in order to secure the best mortgage deal or indeed any deal at all.

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I’m sure what you want to do would be possible and I think the best way would be to speak to your current lender and see what you can work out with them instead of getting a completely new mortgage.

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If you sold for 100k and had an existing mortgage of £89k you have 11k remaining.

If you use this as a deposit on an £85k house you are looking at a LTV of 87.5%.

Due to current market conditions, many lenders will only offer mortgages with a LTV of 70% and lower and so you will need to a) provide a bigger deposit or b) buy a cheaper house.

You need to keep your LTV ratio as low as possible in order to secure the best mortgage deal or indeed any deal at all.

 

There are deals available for 85%-90% LTV as well but if your current Mortgage is portable just go and speak to lender and they will be able to advise you exactly what you can do. Best rates available for 85% LTV is about 5.5% fixed.

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I'm having similar problem.... £20k in the bank and buying for £100k but need £20k for renovations. I managed to get a mortgage LTV at 90% (luckily did it the day before all the crap hit the doodah last week) but still means that I need to pay a £10k deposit, thus reducing my renovation cash. What is crazy is that the bank will lend me almost £200k as long as its less than 80%LTV. It seems that regardless of anything else, its now all to do with LTV being less than 80%, due to all the problems people have got in to by taking 100 - 120% mortgages in the past and then the prices crashing. Shop round but make sure you talk in depth to your current lender as they are likely to have something up their sleeve to retain your custom

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Thanks everyone, will speak to my current lender and mortgage advisor if it comes to it - just need to sell mine first before I can look at doing this anyway!

 

A x

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Make sure you take in to account all your buying/selling costs as this will reduce any money left from the sale of your property!.

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