Pay off offset mortgage?

bluebottle11

Hi All,
My situation is that we currently have £50 000 left to pay off our offset £180 000 mortgage, however we also have £60 000 savings in our offset account.
We have now seen a property we would like to buy, asking price of £225 000. My question is, should we pay off the remainder of our current mortgage, then use all the proceeds from our house sale to put towards the new mortgage or keep the £60 000 savings and put it down as deposit on the new house? Or does it make no difference?!
Many thanks for any assistance.:)

shirlgirl2004

You will need a deposit for the new house that cannot come from the proceeds of the sale of your current home (unless you sell it before you buy the new house) therefore you need to save 10% of £225k plus costs for the initial monies to be paid to solicitor and removal costs etc. It really doesn't make much of a difference once the above is taken into account so if I were you I'd just hang on to it.

bluebottle11

Thanks for the info, so when I apply for the mortgage for the new property, would the deposit not just come out of that?

shirlgirl2004

You need to pay the deposit at exchange of contracts and you don't get the mortgage funds until completion.

DVardysShadow

shirlgirl2004 wrote: »

You need to pay the deposit at exchange of contracts and you don't get the mortgage funds until completion.

Remember that if you are selling, you will be due a deposit from your buyer, so you need to set aside 10% of the difference in price, not 10% of the price of the new one

Egg_custard_2

When I bought my current home 18 months ago, I used the proceeds of the sale of my previous house as the deposit (I owned the previous house outright), and we completed on both properties on the same day so it can be done. From memory, I don't think we put any cash down, we just had the proceeds of the sale plus a mortgage on the balance.

Edit: reading the above posts, I think we did exchange and complete on the same day... so that's probably the only way you can do it.

shirlgirl2004

DVardysShadow wrote: »

Remember that if you are selling, you will be due a deposit from your buyer, so you need to set aside 10% of the difference in price, not 10% of the price of the new one

Good point although if your purchaser hasn't realised this they may not have 10% deposit. In this climate not many people would say tough most would exchange anyway. This could leave a gap unless you can get your vendor to agree a smaller deposit. For the agro it could cause it is always better to err on the side of caution.

shirlgirl2004

Egg_custard wrote: »

When I bought my current home 18 months ago, I used the proceeds of the sale of my previous house as the deposit (I owned the previous house outright), and we completed on both properties on the same day so it can be done. From memory, I don't think we put any cash down, we just had the proceeds of the sale plus a mortgage on the balance.

One can only assume that the deposit from the house you sold was used as the deposit on the house you were buying. If there was a diference in price then it would be unusual for you not to be asked for the difference. Even if you had to say you didn't have it you would be asked.

getmore4less

What rate is the offset

can you get any extra money at the same rate

is it portable

what is the cost of top up borrowing with the current lender.


If definately remortgageing then why pay it off it will sort itself out when you move

Why have more in the offset than the mortgage outstanding many lenders don't pay interest.

Egg_custard_2

shirlgirl2004 wrote: »

One can only assume that the deposit from the house you sold was used as the deposit on the house you were buying. If there was a diference in price then it would be unusual for you not to be asked for the difference. Even if you had to say you didn't have it you would be asked.

No, there was a big difference because we put down the full proceeds of our previous house sale as a deposit on our current house, whereas the people who bought it put down around 40-50% deposit. The only thing I can assume is that it was because we exchanged and completed on the same day.

jungle_jane

getting a new mortgage is expensive in terms of product fees...could you not transfer your existing mortgage to the new property? if you are happy with the product/rate that is...you could top up the difference in your current mortgage and new mortgage with some of the £60k...