What should I do with this mortgage offer?

ficino

I have just taken out a mortgage and have the cheque sitting here for £50k to refurbish my property. I have £40k in savings and expect the refurb will cost in the region of £70k (My builder should be giving me a quote in the next few weeks). I am supposed to make my first payment on the mortgage at the beginning of April of £350 pm, and don't expect the building work to start until May at the earliest. To add to the mix, I am being made redundant at the end of March with a redundancy payment which will last me about 9 months including mortgage repayments.
Should I delay the first mortgage payment and draw down a more accurate amount (when builder's quote is in), and hold off starting the repayment for another 3 months when my savings have been spent on the building work? Or should I bank this cheque and treat it as a loan given that I'll be out of a job in a few weeks? Should I overpay the mortgage (its a repayment), and put the money in an easy access account (I have no other debts). What is the most cost effective thing to do? Any advice is very much appreciated (and not refurbishing the property is not an option).

Leon_W

Too late. You have the money. The mortgage has started with no right to cancel and the payment will be due as per contract.

TrickyDicky

Id put off everything you can payment wise except the mortgage and start looking for a new job ASAP.

ficino

The moprtgage documents say I am free to decline this offer prior to the mortgage commencing and the first payment is due on 7 April, so is that the date of commencement?

GSXRCarlos

does the property *need* the work doing to it???

if not then i suggest you bank the money, put off the building work, and start looking for a job asap, you don't need the stress of losing all your savings, having no job and a mortgage to pay for

GSXRCarlos

ficino wrote: »

The moprtgage documents say I am free to decline this offer prior to the mortgage commencing and the first payment is due on 7 April, so is that the date of commencement?

what would you do with the house if you declined the mortgage?

Leon_W

Do you have a cheque payable to you ?

Leon_W

Look, I have to go out now but what I'm getting at is this.

If you have a cheque then it's too late, the mortgage money has been drawn down by the solicitor into his account, the cheque is then issued on the solicitors account. Lenders do not send cheques. If that's the case you are past the point of no return as you cannot now cancel the agreement.

edited to add: ergo, the money is sat in the solicitors account and you're the one paying interest on it !

ficino

Thanks Leon, That's what I needed to know. As I won't need all the money, do you reckon I should overpay my repayments (which they allow) each month, or stick to the £350 pm? BTW the building work will take about 6 months after which I can always rent a room out and cover the mortgage plus practically all of my bills.