£40,000 Mortgage or Loan?

john.james127

I would like some advice on way a mortgage or loan would better for me.

Here's my situation

My parents have agreed to sell me the family home for £40,000. What I'm wondering is would it be best to get a mortgage or a loan to pay this?

Now I understand that a loan has a higher interest rate but with a loan they'll be no need to pay arrangement fee, solicitors, Surveyor etc.

My plan is to have the loan/mortgage paid of as quickly as possible well before the 25 year standard mortgage length.

After current out goings and bills I can probably afford £600 - £650 each month to pay of the debit.


Thanks in advance for the advice

John

_Andy_

You won't find a loan that large so it will need to be a mortgage.

Karenandian

We are in a similar position. We owe £50k on a Nationwide SVR (6.49%) & have 9 years left on the mortgage. We are currently paying £690 per month, but I checked out a loan on moneysupermarket.com for this amount & term, & it came back as £631 per month (we have an excellent credit rating & no other debts). At first glance, it seems we would save £720 per year (over £6k). Does anyone have any thought as to whether this would be advisable or not?

getmore4less

Do your parents need the £40k now?

If not and their plan to just save it the best option would be to pay them.

The other thing are they going to still live in this place because if they do then could be be potential tax issues.

You also need to check out the stamp duty situation.