really need help .......

lauranurse

I am having a bit of a dilema. I have seen a flat that i would like to buy but it is brand new and isnt going to be ready until june next year. The problem is that i already have a mortgage on a property which is at present up fpr sale but as of yet no offers. My plan was that once my flat sold i would move into my mums until my new place was ready. My mortgage is fixed rate until 2008 and so want to keep my mortgage to avoid the early repayment charge. I have contacted my mortgage provider about the situation and they have said that i can have a 3month period from my mortgage and restart it but i am worried that say my flat sell january time it will still be 5 months til my flat is ready. The other thing also is that the new property i would be expected to pay the 5% deposit at exchange so wld have to take a loan out to pay that until the money comes through from the sale of my place. You see i am in a bit of a dilema coz cld hold off selling but cant afford my mortgage etc plus the added amount of the loan. Really dont know what to do the flat really is a good buy. Have got the number of a financial advisor so going to call him monday but wondered if anyone had any ideas what i could do. Hope this all makes sense

A_Nice_Englishman

First of all, consider whether you could still afford the new mortgage if rates rose to, say, 6 or 7%. You say borrowing just 5% of the purchase price would be a problem.

Then:

Work out what the loan for the 5% deposit would cost you between now and, say, January.
Add the penalties for early repayment on your existing mortgage
Add what you will pay your Mum to stay with her from January to June
Deduct the interest you will get while you have the money from the sale of your flat in the bank between January and June
Deduct what it would have cost you to stay in your present flat from January top June.

Add whatever all that comes to to the price of the new flat and see if it still looks like a good deal.