Loan portability

[Domma35]

Hi all, wondering how easy or not it is to transfer a home loan to another property. My wife and I currently own our PPOR in my wife's name. Mortgage is roughly $265k, house is worth $500-$550 based on comparables. So let's assume equity of $235k at least.

Reduced income (we've had a baby and my wife is no longer working), I've had a career change and a decrease in salary.

We want to purchase a new PPOR but don't (can't) get a loan for anywhere near the amount we want as I am on a low income and am now supporting my wife and son.

Does anyone know whether we can transfer our current mortgage to purchase a new PPOR? We are with ING. Or, is there any other way we can upgrade using the equity in our current PPOR?

Cheers

 

[Perp]

You can transfer your existing loan to another property if your existing loan allows for "substitute of security" - i.e. you keep the same mortgage but it's just secured against a new property.

But:

1) Most loans don't allow this, and

2) If you're upgrading, presumably you need to take on more debt, and even loans allowing substitute of security would need you to re-apply if you're wanting to increase debt.

 

[Peter_Tersteeg]

If your lender allows portability, you'll need to settle both properties on the same day (sell existing & buy new). This little piece of logistics often makes it difficult to do a security substitution.

As Perp suggests, you'll also need to have cash for the difference in property value, or you'll need to qualify for the full loan amount.

 

[Rolf Latham]

ING ..........and

post settlement work............

Ask my staff, prepare for months in advance !

ta
rolf