Pay off or leave small balance

canoehorse

Hello,

I'm sure this question has been asked before on the forum but I can't find it.

I am in the position where I can pay my mortgage off. We will be looking at moving house to a bigger property in 2012 after getting married. Am I better off paying off my mortgage in full or keeping a small amount in there (£3-4k) for when I come to move house. Will it make it easier to get a mortgage? If I can't get another mortgage can I just re-mortgage my current one?

Thanks in advance for the advice.

mlz1413

Why would you not get another mortgage? no income or reduced income?

Do you intend to keep this house and buy another with a mortgage? Or do you hope to sell and then port the outstanding mortgage to the next property?

I think knowing you can get another mortgage and what LTV and % rate will help to answer if you should pay your savings off the mortgage or keep them as a deposit to the next house.

hopefulinvestor_2

I've just posted this in another thread.

I was told to keep a little mortgage to save going through the application process again. If you have a mortgage the bank you are with should lend no problem but if you go without a mortgage and your circumstances have changed they might say no.

At the moment I have a mortgage of about £100 paying I think about £5 month, at the end of the term I will still have payed less interest than the fee they wanted for me to pay it off outright.

ginvzt

canoehorse wrote: »

Hello,

I'm sure this question has been asked before on the forum but I can't find it.

I am in the position where I can pay my mortgage off. We will be looking at moving house to a bigger property in 2012 after getting married. Am I better off paying off my mortgage in full or keeping a small amount in there (£3-4k) for when I come to move house. Will it make it easier to get a mortgage? If I can't get another mortgage can I just re-mortgage my current one?

Thanks in advance for the advice.

If you will be buying another house, it is not called re-mortgage, you would need to port the mortgage to the new house (unless you still keep the old one and rent it out, in which case you would need buy to let mortgage, I understand). From what I read on the forum so far, that application to port mortgage is treated as new application anyway, so you might just as well get a new mortgage. Unless you have a very good rate that you want to keep!

canoehorse

Hi,

thanks for the response. To clarify I would sell the house and port the mortgage to the new property rather than applying for a new mortgage on the property.

Cheers

thenudeone

I believe some banks let you leave a small mortgage balance so that they will continue to store the deeds free of charge, rather than you having to pay a solicitor of for a safe deposit box. Unless you need to use the house as security for another loan, that is worth considering.