Moving House - £20k extra req!!!!!

pauliepie

Need some general advice please.

We have sold our house for £180k and are looking to buy a property for £200k.
Therefore, we require an extra £20k.
I am with skipton at present with a fixed mortgage until 2009.
What are my options to borrow this money?
Can I add this figure onto my existing mortgage or do I take out a seperate interest only loan?
cheers

UK007BullDog

Ask your lender for an additional mortgage loan which is placed alongside your current loan. I take it you are porting your mortgage over to the new property? As long as your income, credit record and affordability fits I cannot see a problem. But talk to your lender first of all.

dwsjarcmcd

I assume you have budgeted for the costs of buying/selling? i.e stamp duty, legal fees, removal, estate agents etc.

If not your going to need a lot more than £20k

pauliepie

Yes, we have approx £6200 in savings which should cover stamp duty, mortgage fee`s, estate agents etc...
I assume its best to stay with my mortgage company for the extra £20k?

pauliepie

Because i need to borrow an additional £20k, is it best to add to my existing mortgage or is it best to take out a seperate £20k mortgage?. If the latter, would it be better as INTEREST or REPAYMENT.
Look forward to ANY comments.

Cheers guys

herbiesjp

If you are porting your current deal, you will be unable to add the £20k to that current deal.

YOu will need to get the £20k at whatever rates they have on offer.

I would suggest this to be the cheapest option as opposed to leaving Skipton or a second charge mortgage.

I would make sure the deal you select would be a no penalty scheme or a penlaty period that ends as close as possible to the expiry of your current fixed rate.

HTH

pauliepie

Cheers herbie,

Skiptons rate for additional borrowing for extg customers is 5.9% fixed until Jan 2010 with fee`s of only £125(completion fee).
I have 17 years left on my other mortgage with them, so should I borrow the £20k over the same term 17 years?
Being a small amount, should I repay by Interest or repayment?
Thanks again

wilson_lfc

personaly i would pay back by repayment. is it the last house you buy??
you need to work how much interest you will be paying over the remainder of your term.
then work out the interest payments you will be making and how you will be paying out, giving the fact that the you will be paying off the interest only and not actually paying off the loan.

so if you do decide to sell this new property, you could still be 20k worst off compard to paying off 3 grand which you may get back.

pauliepie

wilson_lfc wrote:

personaly i would pay back by repayment. is it the last house you buy??
you need to work how much interest you will be paying over the remainder of your term.
then work out the interest payments you will be making and how you will be paying out, giving the fact that the you will be paying off the interest only and not actually paying off the loan.

so if you do decide to sell this new property, you could still be 20k worst off compard to paying off 3 grand which you may get back.

It is my third house so far, on my last 2 moves I have a repayment and a interest only mortgage both with the same number of years left.
Sorry but don`t understand "so if you do decide to sell this new property, you could still be 20k worst off compard to paying off 3 grand which you may get back"?
Can someone explain?
cheers

wilson_lfc

hi,

basically you are paying off your loans interest to the bank. not the amount of the loan you have taken. although this is cheaper to start off with it could take more time to pay and you may lose money in the long run.

now, if you decide to sell this house in two years and it stays the same price, you may have paid off a certain amount of interest on the loan.
in that same time, if you decided to go on the repayment option you would have paid off some of the loan (with interest), even though this may be a minor cut of the loan (3k for instance) you may get that money you paid back because its yours, not the banks interest.

its like renting a house, the interest you pay off is a dead amount.

hope this helps