Downsizing from original mortgage help!

P

prodigy81

Registered User
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69
Hi there,

My sister is in a small bit of arrears which might be capitalised. Now she rang her bank and asked if she could downsize to a smaller mortgage, however they said she would still need 20% deposit!! A total of nearly 70k. Is this accurate information from the bank, she thought that it would be an easy process of selling her home paying off arrears and transferring to new home with a smaller mortgage.. Can anyone help with this??

Kindest regards
 
Is your sister in negative equity?

Housing loans for borrowers in negative equity that wish to obtain a mortgage for a new property are outside the scope of the new Central Bank LTV limits. The LTI requirements are still applicable and ultimately the bank can apply their own stricter requirements.
 
Thanks for your reply, she is not in negative equity, in fact if she sold the house she would have probably 20-30k profit. She is just so miffed that it is crazy that she cannot downsize to another smaller size mortgage with particular more affordability to pay etc. Is there any other way around this?
 
The difficulty with questions like this being posed to a bank is that you can get a gut response from someone who is unaware of the rules. Better to call in to the bank and speak with a mortgage advisor.
Not that I have any huge confidence in an advisors knowledge of what can and can't be agreed!
 
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