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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Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.
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