Trading up query

Re: Would it be possible for us to trade up?

I'm not sure how the bank would view your proposal to be honest. One of the brokers who contributes may give you some idea.

Aside from access to finance, you may want to consider:

How long ago did you buy your house? Would you be liable for stamp duty clawback?

Would you be liable for stamp duty on your new house?

Are you happy to take on the responsibilities and risks of being a landlord?

Can you confirm-one of you works in banking and one of you works in law? How secure are your positions in the current environment?
 
Re: Would it be possible for us to trade up?

Hi CCOVICH,

We bought our house 4 years ago and paid stamp duty so I am not sure if we would be liable to pay more?
 
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Re: Would it be possible for us to trade up?

The negative equity on your home will restrict you from moving that mortgage to another lender but your current lender may be open to switching it to an interest only investment mortgage depending on the rental income it can achieve.

Unfortunately for you, the bank will probably look for the rental income to be 1.5 times the capital and interest repayments. As there are many unoccupied properties out there, some lenders are also discounting the rental income by up to 20% depending on where the property is.
Of course if the property is in a much sought after area then this should not apply to you.

Your salaries are strong enough to support the new mortgage and should also be strong enough to make up any shortfall in the rental income so I would say you have a chance of approval but in this market it is hard to be certain.
 
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