Selling my house & buying another

messrs

Not sure if im posting in the right section - mods please move if this shouldnt be here.


Just wondering how does it work when you are selling your house and buying another house in relation to your mortgage? i always assumed that i could just continue on with my mortgage but just on a different property that id sell my current house, and buy the new one (ideally for a lesser value) and then just continue to pay
but a girl in work told me recently , her brother sold his house but then wasnt able to get approval for a mortgage to buy another house - i would have thought if you were already paying of a mortgage - and never missed a payment - that it would be fairly straight forward

apologies for longwinded post

can anyone give me any info on how this would work?

makeorbrake

The mortgage doesn't travel with you - with the exception of a couple of banks who are allowing people on trackers to trade up and keep the tracker.

On the point of a tracker, if you have one, be aware of what you will be giving up here. Otherwise, the process for a subsequent mortgage will have to start from scratch. Be aware that lending policy may have changed in the interim - so you could well find yourself in a similar scenario as the girl in work described.

Proceed with caution.

TheDriver

plus people don't like getting involved in chains. I personally would run a mile from a seller that wanted to be in a chain

Geuze

messrs wrote: »

Just wondering how does it work when you are selling your house and buying another house in relation to your mortgage? i always assumed that i could just continue on with my mortgage but just on a different property that id sell my current house, and buy the new one (ideally for a lesser value) and then just continue to pay

A mortgage is linked to a particular house.

You can't sell the house, and keep the mortgage.

If you sell the house, you must repay the mortgage with the proceeds.

If you buy another house, then you get a new mortgage.


(Recent exception: some banks, in limited conditions, allow you to carry a tracker mortgage to a new house)

riclad

Banks are alot stricter now, since 2008,re giving mortgages out.
Talk to a mortgage broker, and your bank.
Unless your income is high theres no gaurantee of getting a new mortgage.

MORTGAGE approval depends on your job,
your income, your expenses, are you married, have you children etc
IF you get a loan, its x times your income .
I would not sell up .unless i was 100 per sure of getting a mortgage, and had mortgage approval
eg a letter from the bank,
WE will lend you x amount in 2014.

Trish56

A mortgage is registered on your property so as others have pointed out when you sell the house the mortgage must be redeemed. You must qualify for a new mortgage on your new property.

I would advise you to have a chat with your existing lender and have the following to hand

• P60 for last year
• 3 recent payslips
• evidence of savings
• details of any short term borrowings you may have
• Estimated sale price of your existing property

Your new mortgage will be based on affordability and repayment capacity and a good credit rating which will include your track record on your existing mortgage.

Hope the above helps
Trish56

messrs wrote: »

Not sure if im posting in the right section - mods please move if this shouldnt be here.


Just wondering how does it work when you are selling your house and buying another house in relation to your mortgage? i always assumed that i could just continue on with my mortgage but just on a different property that id sell my current house, and buy the new one (ideally for a lesser value) and then just continue to pay
but a girl in work told me recently , her brother sold his house but then wasnt able to get approval for a mortgage to buy another house - i would have thought if you were already paying of a mortgage - and never missed a payment - that it would be fairly straight forward

apologies for longwinded post

can anyone give me any info on how this would work?

riclad

Most people do not even sell their unless they are ready to but another house ,
They Have a loan preapproved to buy another house ,
they are looking at houses to buy while they are getting ready to sell their own house.

messrs

Thanks to everyone for your answers , suppose it was wishful thinking on my part that my mortgage could just carry over!!

TheDriver wrote: »

plus people don't like getting involved in chains. I personally would run a mile from a seller that wanted to be in a chain

sorry if i sound dumb but dont understand what you mean by a seller wanting to be in a chain? im not trying to get out of paying my mortgage if that is what you mean. what i meant was that i was wondering could i sell my current house - pay back the mortgage in full on it, but still be able to borrow the same capital and buy a new house and then continue paying it of - and stay with the same mortgage company but not have to go through the whole hassle of applying again.

riclad wrote: »

Banks are alot stricter now, since 2008,re giving mortgages out.
Talk to a mortgage broker, and your bank.
Unless your income is high theres no gaurantee of getting a new mortgage.

MORTGAGE approval depends on your job,
your income, your expenses, are you married, have you children etc
IF you get a loan, its x times your income .
I would not sell up .unless i was 100 per sure of getting a mortgage, and had mortgage approval
eg a letter from the bank,
WE will lend you x amount in 2014.

income def not high!! i got approved for my mortgage in nov 2009 as a single applicant with no children,

riclad wrote: »

Most people do not even sell their unless they are ready to but another house ,
They Have a loan preapproved to buy another house ,
they are looking at houses to buy while they are getting ready to sell their own house.

im not doing anything for def yet, i guess its all just thinking out loud, ideally i would love to sell up and move back home but just didnt know how it would work mortgage wise so was just looking to see if someone could fill me in on how it alll works!

riclad

Go to a mortgage broker, get advice ,info. It,s free.
Say you want a loan from bank x, maybe save x amount per week.
They look at your savings record ,
most loans now are 80- 90 per cent .
Unless you are buying a house thats very cheap,
eg house in cavan 2bed 40k.
I Think a chain means
i,ll sell you my house,
but i can only sell it if joe bloggs sells me his house .
IF joe bloggs stops the sale,
i, won,t be able to sell you my house .

OR i,m relying on paddy to buy my house,
if paddy drops out,
i won,t have the money to buy your house.
Until the contract is signed , the seller can stop the transaction anytime he wants to.

messrs

riclad wrote: »

Go to a mortgage broker, get advice ,info. It,s free.
Say you want a loan from bank x, maybe save x amount per week.
They look at your savings record ,
most loans now are 80- 90 per cent .
Unless you are buying a house thats very cheap,
eg house in cavan 2bed 40k.
I Think a chain means
i,ll sell you my house,
but i can only sell it if joe bloggs sells me his house .
IF joe bloggs stops the sale,
i, won,t be able to sell you my house .

OR i,m relying on paddy to buy my house,
if paddy drops out,
i won,t have the money to buy your house.
Until the contract is signed , the seller can stop the transaction anytime he wants to.

Thanks for the info re chains, def wouldnt do that though. Didnt realise all mortgage brokers were free, when I was looking for a mortgage back in 2009 I approached 2 brokers, 1 said it was free but if i got approved the would charge me then & the other told me there was a €50 charge regardless of whether I got approved or not, he was charging for just looking for me!

riclad

I thought brokers were paid in commission by the banks,
or they charge you nothing,
unless they get you a mortgage.
ie most of their income comes from the banks.
I could be wrong.

Geuze

Mortgage brokers are not free.

Typically, the lender pays them for delivering the business.

The commission rate used to be 1%, typically.

So if you borrowed 200k, the broker got 2,000 for a few meetings. Handy money.

Commission rates are now typically 0.5%, I think.

riclad

i Don,t expect brokers to work for free,
I presume they get paid by the banks for finding customers.
Who will be able to pay a mortgage for 20 plus years,

The_Conductor

riclad wrote: »

i Don,t expect brokers to work for free,
I presume they get paid by the banks for finding customers.
Who will be able to pay a mortgage for 20 plus years,

Banks have cut the commissions paid to mortgage brokers, several times, over the past few years. Typically a mortgage broker might now be paid a finders fee of 0.5% of a mortgage value- which is as low as a quarter the rate they once got (and some lenders don't pay anything at all).

Most brokers will have set fees- aka you pay 100 Euro come what may- alongside 0.1 or 0.2% of the value you are seeking, if they secure the loan for you, ontop of any (meagre) fees the lenders may give them.

The days of banks paying mortgage brokers- are gone.......

Trish56

I am a mortgage broker and don't charge fees as all the banks/lenders pay me commission. Ulster is the only bank that do not pay commission to brokers. Some brokers charge fees as a % of the loan, others might charge a nominal fee which is repayable when loan issues mainly as a deterrent for time wasters who can take up a lot of your time, phone calls, printing etc.

When the recession hit lenders reduced commission from up to 1% of the mortgage to between 0.35% to 0.50% with one lender continuing to pay 1%. Lenders are now starting to increase commission again so really there is no need for brokers to charge fees.

The_Conductor wrote: »

Banks have cut the commissions paid to mortgage brokers, several times, over the past few years. Typically a mortgage broker might now be paid a finders fee of 0.5% of a mortgage value- which is as low as a quarter the rate they once got (and some lenders don't pay anything at all).

Most brokers will have set fees- aka you pay 100 Euro come what may- alongside 0.1 or 0.2% of the value you are seeking, if they secure the loan for you, ontop of any (meagre) fees the lenders may give them.

The days of banks paying mortgage brokers- are gone.......

riclad

SO you can go to a broker,
say my income is x ,
how much can i borrow to buy a house.
HE will tell you ,you can borrow x,
he will charge you nothing,
or maybe a small fee .
Which will be refunded if you get a mortgage thru him.

TheDriver

messrs wrote: »

Thanks for the info re chains, def wouldnt do that though. !

so its a question then of selling, paying off the mortgage and renting. Then starting again from scratch.
Other alternative is the chain whereby you want to buy the day you sell which can be very tricky unless you are in a vibrant area of Dublin

Trish56

Once you contact a broker he/she must issue you with their terms of business before conducting any business and fees must be included in those terms. As previously mentioned some brokers charge fees as a % of the mortgage or a nominal amount which may be repayable depending on the broker.

riclad wrote: »

SO you can go to a broker,
say my income is x ,
how much can i borrow to buy a house.
HE will tell you ,you can borrow x,
he will charge you nothing,
or maybe a small fee .
Which will be refunded if you get a mortgage thru him.

riclad

BEING in a buying chain is not
bad,in itself .
if you have finance arranged, to buy another house.
And have x amount left over after paying off your mortgage.

EG my house sale only go,es thru if i can buy another house.
Starting off from scratch is hard ,if you have to pay a high rent ,
and house prices are rising.

Trish56

That is how the majority of people who trade up get a new mortgage. They put their own house up for sale, look for a new property, apply for a mortgage. There will be a condition on the new mortgage that you sell and redeem your existing mortgage before you can draw down the new mortgage. Also you will have to sign contracts to sell and buy so my advice and more than likely your Solicitor's advice would be not to sign contract to buy until you have contract's signed to sell and your Solicitor has the 10% non repayable deposit. Your Solicitor then will have a closing date on both contracts for the same date - payment will be received for sale of your house, existing mortgage will be redeemed from proceeds of sale, new mortgage drawdown and new house paid for.

riclad wrote: »

BEING in a buying chain is not
bad,in itself .
if you have finance arranged, to buy another house.
And have x amount left over after paying off your mortgage.

EG my house sale only go,es thru if i can buy another house.
Starting off from scratch is hard ,if you have to pay a high rent ,
and house prices are rising.

TheDriver

Trish56 wrote: »

That is how the majority of people who trade up get a new mortgage. They put their own house up for sale, look for a new property, apply for a mortgage. There will be a condition on the new mortgage that you sell and redeem your existing mortgage before you can draw down the new mortgage. Also you will have to sign contracts to sell and buy so my advice and more than likely your Solicitor's advice would be not to sign contract to buy until you have contract's signed to sell and your Solicitor has the 10% non repayable deposit. Your Solicitor then will have a closing date on both contracts for the same date - payment will be received for sale of your house, existing mortgage will be redeemed from proceeds of sale, new mortgage drawdown and new house paid for.

except I was involved in a situation like this last year and the seller wouldn't sign until they were ready to buy which meant we were waiting. We got sick of waiting..............

The_Conductor

TheDriver wrote: »

except I was involved in a situation like this last year and the seller wouldn't sign until they were ready to buy which meant we were waiting. We got sick of waiting..............

Lots of people are like this.
The deposit is fully refundable- however, you're not entitled to compensation for the seller screwing you around.
If they try to pull this on you- walk.

messrs

TheDriver wrote: »

so its a question then of selling, paying off the mortgage and renting. Then starting again from scratch.
Other alternative is the chain whereby you want to buy the day you sell which can be very tricky unless you are in a vibrant area of Dublin

Yea pretty much! i dont think i would have to much hassel selling my house ( could be wrong) but i do frequently get notices in the door for estate agents saying they are looking for houses in this area so that just makes me think it would sell - whether i get a good price or not is a different storey!!

i guess i just figured seeing as i have been paying a mortgage without missing any payments for the last 5 years i wouldnt have any trouble or wouldnt have to apply again! just wishful thinking on my part.

Renting could be an option in the location im looking to move to, in the short term , rents woudlnt be that high so could be an option until i (hopefully) get approved for mortgage again