how to prepare for remortgage

skater_kat

i have a flat that i bought by myself for 113k in 2008 (50% shared ownership). the current balance owed is around 79k. i now have a partner, both working, and we are looking to move to a house in a few years time, which in this area is about 250k for a two bed terrace.

I want to prepare for applying for a bigger mortgage when the time comes. I have a lifetime tracker which can be overpaid and payments taken back out without penalty. I have a small overpayment of around 2k at the moment. I wonder if it is better to over pay or save a deposit? obviously i will need to save for legal fees etc etc, but have no idea which is best - pay off more of current mortgage or build a bigger lump sum deposit.

any advice appreciated

R_P_W

what interest rate are you paying?

I'd suggest you save the deposit as then that is liquid rather than being tied up in your property - which depending on the market in your area might not be very easy to sell for what you want to sell it for

getmore4less

If the tracker mortgage is a good rate look at porting options.

More importantly check your shared ownership for any restrictions/conditions on selling.


In the mean time save loads, spend less.

skater_kat

my rate is base rate plus 0.58%. there is a floor of 2% though so i am paying 2.58% at the moment i think.

i know there are some extra legal fees for the SO sale and that it could be tricky.

whislt i understand that cash is king - i wondered if i had a lower LTV ratio at the time of application, could that open up a better remortgage rate? but also i would rather port it as my current deal - would need to find out about this.

sammyjammy

Definitely save the cash, you should get a better rate on savings if you look around. Its the LTV on your new property that counts, it makes no difference if its from cash or previous property.

skater_kat

thanks for all advice