Posted on 28 February 2013 by Paul
I have a house valued at £150,000. We want to downsize and have seen a property valued at £125,000. I have an outstanding mortgage of £17,000 on my initial propoerty. Can I remortgage for £140,000 on interest only in order to buy the new property and when I sell my first property pay off the remortgage?
In theory, as long as you meet lenders standard affordability and lending criteria then you should be able to downsize as you want to.
However a lot of lenders won't go the loan to value (LTV) that you are looking for on your main residence, so we'd have to look at splitting the loan across the two properties. The other obstacle you may come across, is that because you'd need a product that doesn't have any penalties for early redemption, some lenders may not be happy as they'd view this as short term lending (bridging) rather than standard mortgage finance.
It may well be that we'd need to use the relatiosnhips we have with some of the manual lenders to keep the rate down, and get the the deal through for you.
If you'd like to explore your options in more detail, then please let me know and I'll arrange a convenient time for you to speak to one of our consultants.
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