Mortgage Confusment.

annibee

Hello :hello:

I am trying to sort out what we owe and figure out everything etc.

We bought our house this year (1st time buyers) this is the first experience of mortgages and im just really confused...:o

The house was 168,000 and we got a mortgage for 142,800 (plus 999 arrangement)

We are not planning in staying here for very long (2 years at most) as I am now pregnant with #2 so we will want a three or more bed property (this is 2) the house was cheap(in area) as it needed repair so as OH's family are all different tradespeople we took it on knowing we wont spend that much fixing it up.

If we moved in say two years what would we have to pay back to the Mortgage people? It says in the document that the amount repayable is 271,634.05 - obviously this includes interest, Im just so confused lol

If we sold our house for say 185,000 would that all go to the Mortgage company and we would still owe more?

Anyone who can simplify this in plain terms would be much appreciated.....

ps - they should have mortgage classes in schools so you understand them a bit more (or am i just being dumb and everyone else understands them perfectly?)

dunstonh

f we moved in say two years what would we have to pay back to the Mortgage people?

Whatever the mortgage balance is at the time. Probably not much different from what it is now as it doesnt change much in the early years (assuming you are on capital & repayment).

If we sold our house for say 185,000 would that all go to the Mortgage company and we would still owe more?

The lender only wants what they are owed and what fees you have to pay (such as redemption charge and ERC if applicable).

The real cost is the house move and purchase. That can run into tens of thousands of pounds plus your increased deposit that you will need. How much are the houses you are looking to buy and how much extra deposit do you have saved up to cover that increase?

ps - they should have mortgage classes in schools so you understand them a bit more (or am i just being dumb and everyone else understands them perfectly?)

If you go down that route then schools will have to teach people how to service cars, how to build their own extensions, how to rewire a house, how to plumb, how to do legal work etc etc. If you know what you are doing you can DIY. If you dont know what you are doing you use a professional to do it. So, in this case, you should look at a whole of market broker or an independent mortgage adviser.

GMS

The total amount payable to which you refer is the amount you would pay if you kept that mortgage for the full term, i.e until it was fully repaid.

If you sell and repay it will be the amount owing at the time, which will be less than you originally borrowed assuming you have made all due payments in full and on time, and it is a repayment mortgage. Early Repayment Charges may apply depending upon your mortgage deal.

sophievenusdoom

annibee wrote: »

Hello :hello:

I am trying to sort out what we owe and figure out everything etc.

We bought our house this year (1st time buyers) this is the first experience of mortgages and im just really confused...:o

The house was 168,000 and we got a mortgage for 142,800 (plus 999 arrangement)

We are not planning in staying here for very long (2 years at most) as I am now pregnant with #2 so we will want a three or more bed property (this is 2) the house was cheap(in area) as it needed repair so as OH's family are all different tradespeople we took it on knowing we wont spend that much fixing it up.

If we moved in say two years what would we have to pay back to the Mortgage people? It says in the document that the amount repayable is 271,634.05 - obviously this includes interest, Im just so confused lol

If we sold our house for say 185,000 would that all go to the Mortgage company and we would still owe more?

Anyone who can simplify this in plain terms would be much appreciated.....

ps - they should have mortgage classes in schools so you understand them a bit more (or am i just being dumb and everyone else understands them perfectly?)

I have to admit, I was pretty clueless till I started posting on this forum lol! If your house is worth less than your current mortgage this means you are in negative equity therefore you would owe the mortgage company the difference between what you sell it for, and the outstanding balance.

annibee

Aha! Thank You that makes much more sense!

And the Houses we are looking at buying will be less or the same price as the one we sell...... We will be looking for a fixer upper as a) not afraid of hard work to get what we want and b) not going to buy a house more expensive just because we can. The deposit will come out of what we sel this house for after paying fees etc. We put a fairly big deposit on this one to start with and yes we have made all payments full and on time!

I feel much better knowing its not going to be 100k more than i originally thought lol!

Thanks again!!

annibee

sophievenusdoom wrote: »

I have to admit, I was pretty clueless till I started posting on this forum lol! If your house is worth less than your current mortgage this means you are in negative equity therefore you would owe the mortgage company the difference between what you sell it for, and the outstanding balance.

Lol im not alone then. The house is already worth much more than e paid so thats not a problem :cool: but thats good to know. Thanks x

sophievenusdoom

annibee wrote: »

Lol im not alone then

Lol, not at all - it's what these forums are for though; to get people a little more clued up on stuff that is extremely important!

dimbo61

Buying a "run down" property that needs "doing up" is not a bad idea provided you do a good job and keep the costs reasonable.
You wont have paid much off the mortgage in the first 2 years ( is the term 25 years ? )
So if you have put in a new bathroom and kitchen because the old ones were 30/40 years old will add value provided its in keeping with the overall value of the property!
Its no good putting a £25K kitchen in a £75K flat/house nor is it a good idea to put a £10K kitchen in a £750K property.
You need to get the balance right so dont expect in the current market to add value to a property unless you got it very cheap ( compared to others on the same street) or you put a large and suitable extension on it.