A2H GO
Member
Registered: 14th Sep 04
Location: Stoke
User status: Offline
|
Were currently on shared ownership with our house, we mortgaged 25% (with a 25% deposit) of the property 18 months ago and pay rent on the other 75%. This is obviously a lot cheaper than a full mortgage and tbh we've been using the spare money to buy things for the house, sort the garden and generally enjoy ourselves, holidays etc.
During this time weve also saved around £3.5k and are now looking to remortgage for the full 100% as everythings now how we want it and we realise the rent each month is dead money. With our savings this would take us to about 92% loan to value. The only provider we can see offering over 90% LTV are Skipton BS who go up to 95%.
Do we go with Skipton now or save for another 5-6 months for the additional £2.5k needed for a 90% mortgage, in which time we will have paid another £1500 in rent?
Skipton @ 95% LTV offer 6.99% however at 90% LTV we would have a lot more choice.
|
James
Member
Registered: 1st Jun 02
Location: Surrey
User status: Offline
|
Save for 90%. I got 90% for 5.69% (best on the market) a few weeks ago with no arrangement fee and £250 cashback.
|
VrsTurbo
Premium Member
Registered: 8th Jun 10
User status: Offline
|
If its with a Housing assiciation i would check your lease as you have to be there for a set period before you can buy the rest and in some cases can only step like 10% every 1 year.
|
A2H GO
Member
Registered: 14th Sep 04
Location: Stoke
User status: Offline
|
quote:
Originally posted by James
Save for 90%. I got 90% for 5.69% (best on the market) a few weeks ago with no arrangement fee and £250 cashback.
I supose we've paid the rent this long a few more months wont hurt. My heart is saying 90% but my head is saying just get it sorted now. 
[Edited on 18-04-2011 by A2H GO]
|
A2H GO
Member
Registered: 14th Sep 04
Location: Stoke
User status: Offline
|
quote:
Originally posted by VrsTurbo
If its with a Housing assiciation i would check your lease as you have to be there for a set period before you can buy the rest and in some cases can only step like 10% every 1 year.
We asked all the questions before taking out the SO mortgage and made sure we got the responses in writing from the housing association as we were fully intending to go from 25% to 100% within 2 years of taking it out.
|
Ben G
Member
Registered: 12th Jan 07
Location: Essex
User status: Offline
|
i would wait until you have enough for a 90% mortgage.
either borrow the money from family or save up as my 90% fixed rate mortgage is 6.05% and you can get better these days as nath has shown.
|
A2H GO
Member
Registered: 14th Sep 04
Location: Stoke
User status: Offline
|
Cool. I've just paid my loan off on the car so that frees up a bit of extra money each month and finally paid my overdraft back so apart from the mortgage im debt free.
|
John
Member
Registered: 30th Jun 03
User status: Offline
|
Is that 92% LTV realistic?
Banks valuation might not match yours which may make LTV even higher.
|
Ian
Site Administrator
Registered: 28th Aug 99
Location: Liverpool
User status: Offline
|
Easiest thing to do is to make it look like you have 90% LTV even if you don't. Either borrow the money from elsewhere or over-value the house.
Do also bear in mind that any set up fee is also thrown away particularly on a short fix like that (2 years?) because the product will end and you'll be on a fairly poor base rate tracker until you move again and pay more fees.
|
Ian
Site Administrator
Registered: 28th Aug 99
Location: Liverpool
User status: Offline
|
quote:
Originally posted by A2H GO
the rent each month is dead money.
So is fees and high interest rates.
What is your current rate?
|
A2H GO
Member
Registered: 14th Sep 04
Location: Stoke
User status: Offline
|
quote:
Originally posted by John
Is that 92% LTV realistic?
Banks valuation might not match yours which may make LTV even higher.
Were assuming the house is still worth the same as we paid for it based on it being a new build and them still selling for the same price. We could be wrong though and without paying £315 for a valuation we won't know for sure.
|
A2H GO
Member
Registered: 14th Sep 04
Location: Stoke
User status: Offline
|
quote:
Originally posted by Ian
quote:
Originally posted by A2H GO
the rent each month is dead money.
So is fees and high interest rates.
What is your current rate?
Current rate on the 25% mortgaged is 4.69% 3 year fixed due to end in August next year, £400 to buy out and go with someone else.
|
John
Member
Registered: 30th Jun 03
User status: Offline
|
Just from reading on MSE, you'll need to be careful you don't get caught out.
Could try the old estate agent trick although they could be miles away from a mortgage valuer.
|
Ian
Site Administrator
Registered: 28th Aug 99
Location: Liverpool
User status: Offline
|
So
£400 to buy out
£195 set up on the next one
£315 valuation
The tie-in rate is higher, the residual rate is probably higher.
I've not done the maths properly but currently I think you're bonkers to even consider it.
|
A2H GO
Member
Registered: 14th Sep 04
Location: Stoke
User status: Offline
|
quote:
Originally posted by Ian
So
£400 to buy out
£195 set up on the next one
£315 valuation
The tie-in rate is higher, the residual rate is probably higher.
I've not done the maths properly but currently I think you're bonkers to even consider it.
Really!? I tought that having a full mortgage and actually have some of your payment come of the balance each month would be better than paying rent regardless of how much it cost?
Would we be better paying the £3k we've got off the mortgage and then overpaying on the mortgage for the next few months instead whilst our interest rate is pretty low?
|
Chris
Premium Member
Registered: 21st Sep 99
User status: Offline
|
If the house price drops does this effect the 75% owed? If so under value the house to lower the 75% buy out, but this will not be so helpful for reprice as the company will look at market gains on the price you got on the house.
|
Ian
Site Administrator
Registered: 28th Aug 99
Location: Liverpool
User status: Offline
|
quote:
Originally posted by A2H GO
having a full mortgage and actually have some of your payment come of the balance each month would be better than paying rent regardless of how much it cost?
Of course not. Project it forward to when you sell the house, it'll have a value and you'll subtract from that what you owe.
Which if you've been spending money on fees and higher interest rates then you'll owe just as much as if you paid less interest and spent a bit on rent.
You need to do the maths properly but mortgage and ownership costs a lot of money, and appears to be disproportionate against your current arrangements.
|
A2H GO
Member
Registered: 14th Sep 04
Location: Stoke
User status: Offline
|
Right I need to sit down and do the math properly and work out the total cost of buying the rest or carrying on as we are 
[Edited on 18-04-2011 by A2H GO]
|
A2H GO
Member
Registered: 14th Sep 04
Location: Stoke
User status: Offline
|
Thank you CS, if ive done this right, you just saved me over £8000 in the next two years.
I've gone away and done the maths, on a 95% mortgage at 6.99% over the next two years we would pay £700pm which would result in approx £1500 being paid off the mortgage, the rest being interest.
If we upped the direct debit on our current mortgage so that including the rent we paid the same amount each month (£700) we would pay £9500 off the mortgage.
|
ed
Member
Registered: 10th Sep 03
User status: Offline
|
Bit late on answering because it seems you've figured out what to do. But I'd say your best option is to pay off as much of your current mortgage before you try and re-mortgage using an expensive product. That way when you come to move, you ought to have more equity in this property for use on the new place.
|
A2H GO
Member
Registered: 14th Sep 04
Location: Stoke
User status: Offline
|
I rang Halifax, they said we can only overpay by up to 10% of the balance each year, which for us is about £160 a month. We could do that and then put the other £150 in savings each month.
The only thing that worries me is that we will still only own 25% and if the property goes up in value, say £8k in the next two years, we will only get £2k of that.
|
