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Confused how does part exchanging your house for a new build work

My friend told me that it comes off the existing price of the new build, but I don't understand how it works because I still have a lot to pay on my existing mortgage. So if I was to part ex, does the part ex clear this old mortgage and do I have to get a new mortgage on the new build for the full amount? What she has said is that I could sell mine for example in part ex for 60k when I have a mortgage for 70k, this would be then taken off a new build of 100k leave me with 10k outstanding on the old and 40k on the new. Is that correct it seems too easy. I am really confused.

Asked on Jul 20 2010, Home Finance in Hyde | Report content

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    Mark Heneg...

    It is straight forward, as long as your current mortgage is portable and the loan to value is the correct amount, I would suggest you talk with your current lender to ensure you can get a mortgage, the bank wouldnt allow you to sell for less than your mortgage as in the figures you state above you would end up with a 110k mortgage on a property bought for 100k, 10k negative equity, currently you need a minimum of 10% deposit, and more for good rates

    Answered on Jul 20 2010, Report content
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