Mortgages with no ERC' s ?

paul.g._2-2

Hi all,

i am currently looking to sell my house ( no mortgage ) and buy another house. I have a large deposit for house. house price agreed at 115 k deposit 55k house selling roughly 83k.

So my question is when i sell my house i would obviously ( i think ) just pay mortgage straight off. So is it advisable to only go for a mortgage with no ERC ? There are bound to be good and bad about such a mortgage.

any advice would be much appreciated .

Paul

dwsjarcmcd

Yes your mortgage will be repaid on completion of the sale. Regarding any new mortgage, are you porting your mortgage to the new property? This means the lender effectively re-lends you the same amount as you currently have and you take a new lending product for any increase. All this is subject to the lender approving the loan again.

Regarding taking a loan with no ERC's, the basic rule of thumb is no ERC's = higher rate but greater flexibility, whereas a product with ERC's = lower rate but less flexibility. So whether it's good not to have ERC's depends on whether you intend to move in the period you are tied in for or some other major change in circumstances occurs and you need to move.

paul.g._2-2

Thanks for reply, as i have no mortgage on house i am in now the mortgage i am after is for new home i,m moving into.

When i sell house i am in now i will be in a position of clearing mortgage on new home.

I suppose i have to weigh up higher interest rate with no ERC to lower with ERC.

Thanks again.

dimbo61

You could also consider an OFFSET mortgage.
You take out the mortgage on the new property and when you sell your existing home then put the money into the offset account.
Taking out a mortgage has costs!!!
Could you wait until your existing place is sold before buying the new property?