Mortgage & Loan?

squiffyjack

I am trying to keep the house after breaking up with my boyfriend, we currently have a £97,350 mortgage with Northern Rock, I have just got an offset mortgage in principe with first direct for £150,000 - the extra is to pay my partner his equity. I have just got the papers from first direct and it shows £97,350 required for mortgage, and £52,650 as an offset loan (same term & rate). Can anybody explain why it has been split like this, and will other lenders do the same?

JulieHK

Can I ask the value of your property ?

squiffyjack

It will be valued about £270,000

herbiesjp

Most lenders would have it down as one lump sum - normally there is a split like this if the lender is agreeing a facility i.e you initially want to re-mortgage for the £97k with the ability of drawing the down the balance (up to the £150k) as and when you need to.

However I am guessing that you would need to draw down the funds straight away to re-mortgage and pay back your boyfriend.

Do you have savings somehwere? Will you be using the offset facility - otherwise it may be an expensive option, as offsets tend to have higher rates.

Have you looked at other deals?

HTH

squiffyjack

I don't have much savings, but i am hoping to put as much away each month as i can, and overpay - don't like any debt! haven't looked anywhere else as i bank with them and wanted 5x mortgage thought they would be best as they have access to all my in and outgoings. I would be using the funds straight away, but for some reason i have a problem with the extra being a loan rather than part of the mortgage!

JulieHK

It does seem strange that they want to do it this way, I would contact a whole of market fees free broker and see what they can offer. The high income multiples are quite standard these days and you may get offered a better deal elsewhere.