Newish buyer needs advice on mortgage stuff concerning shared ownership

garethmasongordon

Hi there,

My question is this:

I purchased my house on a split owner ship deal 70% mortgage 30% buy back.

I will soon be in a position where i can buy back the first third of the 30% i dont own.

I need some advice as what best to do. I estimate that the first third will be in the area of about 20K. Although i will have the money i wish to use some of the money for home inprovements therefore i want to use 10K to go towards the first third and add the other 10K required onto my existing mortgage.

The original mortgagge was for 132500 and has been running for about over a year , how do i go about asking the Halifax to stump up another 10k on top of my mortgage? How do i then negotiate a new fixed term agreement (this is due aroound December)? Secondly when i finish in the Army next year i will get around 55K which i was going to use to pay of the remainnder of the 20% i dont own. Is this the best use for that some of money?

If im currently paying around £780 a month on my mortgage what is the likely increase going to be if i borrow an extra 10K on top? I think my current interest rate is either 5.9% or 5.09% as i was aa first time buyer and that was the standard rate Halifax woould give me at the time.

I probably havent phrased this question very welll, but i would really appreciate some help please,

Gareth

opinions4u

Ring the Halifax?

kingstreet

It isn't clear if this is shared ownership, or shared equity.

Assuming it's the former, first thing you need to do is ask the landlord for details of their "staircasing" provisions. These may also be found in your lease.

Once you have that, you can think about approaching your lender. If they are willing to allow you further borrowing it will be based on a product available today, not on your current rate. You'll therefore have a mortgage split into two rate products with different terms and end-dates.

As to your overpayment concerns. You need to avoid early repayment penalties, so pay as much as you can, probably 10% a year, until the penalty ends, then pay off the remainder when you can if you feel that's right for you and your circumstances at the time.