transfering current mortgage to diff house

calmspirit

Hi
for full story (if you have time to read!)

http://forums.moneysavingexpert.com/showthread.html?t=352126&page=2

http://forums.moneysavingexpert.com/showthread.html?t=352126&page=2

I need advice !

long story but situation is...I am on an interest only discounted mortgage at moment, discount has 2 years to run. I want to move, found that I can move mortgage to another property......early redemption fees would have meant thousands on cost of moving!
I can transfer mortgage to another property with no early redemption fees, or if lower mortgage only pay redemption fees on difference....this will save me thousands on costs of moving. I just have to try find out what info they will be asking me for regarding income....as I got a self cert mortgage originally and not sure if they will ask for proff of income etc this time round...or if i will be allowed to self cert again?!

3 estate agents today, realistic price for house 160-165K....
fees probably about 6k including estate agents, solicitor, stamp duty and anything else i could think of..VAT, land reg, searches,bank transfer, etc.


so.... selling for say
160000 gives me 64K to play with
buy at 135000? put 60 equity back in reduces mort to 75000? paying off some debts and early redemption on the 15k difference?
Leaves me still struggling but with option at some point to change to a repayment mortgage when this deal ends/timed with kids both being in secondary school by then....more options to increase hours/income.

I need to plan to start paying off capital at some point in the distant future as am on interest only at mo.

does this make sense? anyone think this is a good idea? if i reduce to 75k mortgage my repayments will reduce a bit, enabling change to repayment after discount period finishes IF i am earning enough, will have to do another SOA based on this i think and see if it works......think i am missing something!

thanks for any advice/comments

thesaint

I'm sure there's a question in there somewhere, what is it?

MarkyMarkD

If your mortgage is based on self-certified income, then that should still apply when you port the mortgage to a new property.

You should only consider paying a part redemption penalty on the £15k difference if there is no flexibility within the mortgage (or if you can't afford the new mortgage based on your income, but as you are down-sizing I'm assuming that isn't relevant). In other words, if the mortgage allows a certain level of overpayments, it may be worth porting the full mortgage amount and THEN making an overpayment up to the limit allowed.

Depending on the level of the discount you are getting, it may be worth (even if the above doesn't apply) keeping the extra £15k and saving it - the interest you earn may be sufficient to cover the mortgage when you consider that you are saving the redemption penalty.