Joint Mortgages when one person has a mortgage outstanding

R_P_W

Our new mortgage is at 85% LTV (and is a lot more than my existing mortgage due to buying property in London). It was with nationwide.

When i spoke to my broker her said there are more 'options' available to me if i was able to rent it etc, but as some others have said above I dont really want the hassle of renting a property more than 100 miles away from where I'm gonna be living.

I would be happy to break even and sell after costs etc and slighty less happy to sell at a small loss, becaise the money im paying to service the mortgage can then be used to overpay my larger new mortgage (which i want to reduce as soon as we can)

Toiletduck

JimmyTheWig wrote: »

I don't know if it is obvious or not, but you are free to use some of your deposit money to pay off the existing mortgage. (Obviously that leaves less deposit for the new place.)
I'm not saying that that's what you want to do, but it depends on how much / how soon you want to move.

Its just totally soul destroying to do that and I think it would actually be cheaper to let it stand empty, consider the following estimate:

If I have to pay £10k off the mortgage to be able to sell, how long would the house standing empty cost me this much:

Monthly Interest: ~£280
Council Tax ~£56 (Perhaps zero if i remove the furniture and do some decorating?)
Water ~£14
Electricity ~£5 (Security lighting, alarm power only)
Gas ~£0
Building insurance ~£15
Total £370 per month

So it could stand empty for 27 months before it has cost me £10k, and thats £10k spread over more than 2 years that will have no impact on our current savings rather than an immediate £10k hit. You could do an NPV analysis to work out how long it would have to stand empty before the £10k upfront cost is cheaper than the ongoing running costs but it would be quite a bit more than 27 months!

R_P_W

I woulnd't want a property to remain empty for that length of time! There will be maintence costs to factor in as well.

You have the following options from my perspective based on what you have said:-

1. Don't look to move just yet. Continue to save as much as you possibly can over the next year or so.

2. Sell your house at a level it will pay off your mortgage (plus selling costs) and apply for a 90% LTV mortgage on a new property.

3. Rent your property on a BTL and buy your new place.

At the moment you cant really pay off the 10k from your existing mortgage is sell it at a price meaning you would have to make up that short fall - as then you won't have your 10% deposit for new mortgage.

I'd advise speaking to an independent broker who can advise what lenders and how they are likely to view your situation.

Toiletduck

R_P_W wrote: »

I woulnd't want a property to remain empty for that length of time! There will be maintence costs to factor in as well.

You have the following options from my perspective based on what you have said:-

1. Don't look to move just yet. Continue to save as much as you possibly can over the next year or so.

2. Sell your house at a level it will pay off your mortgage (plus selling costs) and apply for a 90% LTV mortgage on a new property.

3. Rent your property on a BTL and buy your new place.

At the moment you cant really pay off the 10k from your existing mortgage is sell it at a price meaning you would have to make up that short fall - as then you won't have your 10% deposit for new mortgage.

I'd advise speaking to an independent broker who can advise what lenders and how they are likely to view your situation.

Yes I agree completely, the current plan is to sell if possible then rent before buying anyway, I'm really just thinking of the worst case situation. In the short term if we do not sell we will not move, it's just being a small 2 bed we are going to out grow it at some point.

bigadaj

If the house is empty then you won't be covered by normal, if any, insurance, so this will cost considerably more; you obviously need to insure it as a condition if your mortgage.

Thrugelmir

Toiletduck wrote: »

Gas ~£0

Burst pipes?

Thrugelmir

Toiletduck wrote: »

However I am just thinking worst case here, its only been on sale for 2 weeks so its pretty early days.

Houses can take months to obtain an offer on, let alone sell.

What's your current rate of mortgage interest?

Toiletduck

Thrugelmir wrote: »

Burst pipes?

It's one way of identifying a leak!

Toiletduck

Thrugelmir wrote: »

Houses can take months to obtain an offer on, let alone sell.

What's your current rate of mortgage interest?

4.24% although the fixed rate expires in August, this is another issue, as it stands it's going onto the Britannia svr which is a little more expensive, however obviously I don't want to sign upto a new mortgage right now so I think I am just going to have to live with it.

Thrugelmir

Toiletduck wrote: »

4.24% although the fixed rate expires in August, this is another issue, as it stands it's going onto the Britannia svr which is a little more expensive, however obviously I don't want to sign upto a new mortgage right now so I think I am just going to have to live with it.

May be worth overpaying the mortgage than putting money into a savings account. You'll obtain a better return.