mortgage advice

steevs28

Hello all, hoping somebody can offer some advice on this

4 months ago I took up an option to buy an apartment from barratt homes on the dream start scheme, this being get a mortgage on 75% of the value and the remaining 25% will be payable to barratt after 10 years at then market value of the property.

I have recently managed to save £7000 and was thinking of paying off 5% of the 25% owed to Barratt homes.

I am unsure however whether this is the right thing to do, I was also thinking of using my savings to overpay on my mortgage, or even look at remortgaging for the full value of the apartment, while this would increase my monthly payments I would also have the peace of mind of not having to pay a huge lump sum back in 10 years.

Would appreciate any help anyone can give, im just basically looking for the best way to use my £7000 savings.

getmore4less

£7k=5%, so 25% is £35k 100% is £140k

What rent do you pay on the 25%. so what does it cost compared to borrowing?

Which way do you think prices will go.
Who pays/decides the current value?

steevs28

right, I bought on barratts dream start scheme so I dont pay any rent on the remaining 25%, I do however need to pay the 25% back in 10 years at the then market value which is decided by 2 valuers, one from myself and one from barratt which is than averaged out.

I bought for £106,000 and my mortgage is for £77,000

VIGILANT22

steevs28...If poss carry on saving and steer clear of these schemes...wait until you have enough deposit for your own home....without the "Barratts" or similar carrot hanging over you...If you take this advice, you will be grateful to me one day....

steevs28

Right, well thanks for the advice but that wasnt my question.

Its a bit late to steer clear now as i have been living there for 4 months.

VIGILANT22 wrote: »

steevs28...If poss carry on saving and steer clear of these schemes...wait until you have enough deposit for your own home....without the "Barratts" or similar carrot hanging over you...If you take this advice, you will be grateful to me one day....

getmore4less

steevs28 wrote: »

right, I bought on barratts dream start scheme so I dont pay any rent on the remaining 25%, I do however need to pay the 25% back in 10 years at the then market value which is decided by 2 valuers, one from myself and one from barratt which is than averaged out.

I bought for £106,000 and my mortgage is for £77,000

If not paying any rent on the 25% then I would hang on and keep saving rather than borrow more money.

Keep an eye on prices and buy when the trade off of paying interest on borrowing more is less than the costs of rising prices.