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Thread ID: 99525	2009-05-05 08:37:00	Mortgage question.	pine-o-cleen (2955)	PC World Chat

Post ID	Timestamp	Content	User
771270	2009-05-05 08:37:00	Ok here's my scenario. My wife and I currently own a house in the Wairarapa that we built approx 1 year ago and have a $180,000 mortgage. We are thinking of moving to Upper Hutt. The mortgage is leveraged against the equity we have in the house and land (the finished house and land were valued at $215,000 when we got the mortgage). That leaves a difference of $35,000 (19.4% of the mortgage) If we applied for a loan today I am told that we would be turned down as 20% equity is required. My question is this: If we were to buy a new house, would the bank transfer the mortgage to the new house, or would we have to re-apply from scratch? In other words, is this possible? This is our first mortgage, and were struggling to grasp how it all works, and the bank hasn't exactly been helpful. They have basically expected us to know everything about a mortgage and have treated us like we were idiots every time we ask a question. We would switch banks in a second if we could.	pine-o-cleen (2955)
771271	2009-05-05 08:41:00	We are thinking of moving to Upper Hutt. :eek: Why would you wanna do that?????	allblack (6574)
771272	2009-05-05 09:15:00	Ok here's my scenario . My wife and I currently own a house in the Wairarapa that we built approx 1 year ago and have a $180,000 mortgage . We are thinking of moving to Upper Hutt . The mortgage is leveraged against the equity we have in the house and land (the finished house and land were valued at $215,000 when we got the mortgage) . That leaves a difference of $35,000 (19 . 4% of the mortgage) If we applied for a loan today I am told that we would be turned down as 20% equity is required . My question is this: If we were to buy a new house, would the bank transfer the mortgage to the new house, or would we have to re-apply from scratch? In other words, is this possible? This is our first mortgage, and were struggling to grasp how it all works, and the bank hasn't exactly been helpful . They have basically expected us to know everything about a mortgage and have treated us like we were idiots every time we ask a question . We would switch banks in a second if we could . Yes, when we signed up for our first mortgage we found that the banks expected us to be au fait with all the terminology too . First thing I'd do is get a good mortgage broker; ours was fantastic, and played the banks off against one another to get us the best deal . Here's ( . kmm . net . nz/page . pasp?pageid=315" target="_blank">www . kmm . net . nz) your local brokers from the same firm . I don't think a mortgage can actually be transferred as such, as it's a contract around for the title of a property - new property, new mortgage etc . You don't actually have to have 20% equity either, but you find that a lot of doors open for you if you do (25% is even better)	nofam (9009)
771273	2009-05-05 09:32:00	No you can't transfer a mortgage. It's secured against your land and must be removed at sale. So - the loan is repaid. However your bank will want to keep you as a customer so they'll be keen to lend on another property. Good interest rates at the moment too. Yes you have to reapply. Right now banks are nervous so 20% equity is normal. In fact until the early 1990s, 25% equity was the rule. You've always been able to borrow above that if you have enough income, but the interest rate jumps. Basically the bank is interested in: The market value of your property - which might be less than the price you agree to pay. Make any purchase subject to a valuation and finance. You can always waive the valuation if it appears unnecessary but research property values in the location before you sign anything, and look at comparable sales. Its a buyers market. Your income - a $1 million price on a $2 million property is no good if you are on a benefit - you won't be able to make the monthly payments. Your contribution to the purchase. The more money you put in, the lower the bank's risk. They like that. You can negotiate bank loan fees - I've rarely paid them - and get excellent low interest at the moment. As for brokers......some are good. You can never be sure because the fee they get from the bank influences their advice. What a surprise.....;) Before going to a broker, ask your current bank - there is a powerful incentive for them not to lose you. Hope this helps.	Winston001 (3612)
771274	2009-05-05 09:35:00	The mortgage is leveraged against the equity we have in the house and land (the finished house and land were valued at $215,000 when we got the mortgage). That leaves a difference of $35,000 (19.4% of the mortgage) If we applied for a loan today I am told that we would be turned down as 20% equity is required. $35K is only 16.28% equity in the property. If you get this amount as cash in hand when you sell your house, that will give you 20% deposit on a $175K house. Nofam is right, shop around, check out those mortgage brokers (remember they are probably on a commision from the bank) and above all - if you don't like your current bank - ditch the bastards!	decibel (11645)
771275	2009-05-05 09:39:00	While talking about people with unmarried parents - there was (and probably still is) a radio station in Australia which ran a monthly "Bastard Bank of the Month" competition. Some of the winners would have you questioning all faith in human beings, certainly in the efficiency/intellect of private enterprise.	decibel (11645)
771276	2009-05-05 10:34:00	It depends on your bank. We were going to move last year and the bank (ANZ) would hold the mortgage for us and then put it against the new house, transferring was not a problem. With current market maybe they might not now I don't know. What we have learned over the years is don't keep switching banks. I think we have been with a lot and each time the interest at the start of the mortgage is the highest part it gets less as you go through the mortgage so we have several times paying the highest amount.	Bantu (52)
771277	2009-05-05 11:32:00	$35K is only 16.28% equity in the property. If you get this amount as cash in hand when you sell your house, that will give you 20% deposit on a $175K house.... if you don't like your current bank - ditch the bastards! Thats the thing. We have diddly squat in savings and $175,000 isn't going to be enough to buy anything in upper hutt, and the way the property market is at the moment I don't think we would get anything near the valuation. So it looks like we either rent, or flag the idea.	pine-o-cleen (2955)
771278	2009-05-05 12:39:00	My Girl friend is a bank manager and now I will let her type... You need to look at the current market value of the property (as in most areas of the country these have reduced over the past 12 months) if you are wanting to work out the current equity of your property and then also make an allowance for real estate commissions which would be deducted from the sale proceeds. So current market value, less mortgage/loan balance, less real estate commission, equals funds that you would have to put towards your next property purchase. Yes, banks are as a rule only lending to 80% of the purchase price/current value of the property, however these are constanlty under review by the banks to meet the current financial market, so may just be a wait and see what happens. Another option would be to retain your existing property and rent this out and hopefully this would be enough to cover your existing mortgage payments move to upper hutt and rent a property there and wait for the market to recover and the banks to change their lending policies then look at selling and rebuying.	radium (8645)
771279	2009-05-05 20:50:00	No you can't transfer a mortgage . It's secured against your land and must be removed at sale . So - the loan is repaid . However your bank will want to keep you as a customer so they'll be keen to lend on another property . Good interest rates at the moment too . Yes you have to reapply . But although Winston 001 is right, some banks have offered what they call a Transfer . However all those points apply whatever the bank wants to call it . Why not just stay there? I'm a big fan of making mortgages go down, not up and as you say, houses cost more in Wellington .	pctek (84)
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