Part Ownership "Final Staircasing"

Deleerious

I bought 75% of a property valued at £105,000.00 in Aug 05. Due to time dragging on we never got into the property until March 2006.

Currently i therefore have a mortgage of £78,500.00. I am looking now at getting the final 25% of the mortgage.

My flat has been valued at approx £140,000.00 so i will therefore have to pay 25% of this "new" £140,000.00 figure.

I am fixed for one more year at 5.2%, question is do i stay fixed with my current loaner, or move mortgage for the full amount?

Your advice welcomed

Deleerious D

rizla01

Do you know how much penalty you will have to pay to relinquish the existing mortgage. I.E. Early Settlement Fee?

Deleerious

Just checked the docs i have on the £78,500 mortgage and it's £2,375.00 So what's that about .3% of the overall mortgage?

robertbruce

Hi
I don't know how others feel, but I am always reluctant to give anyone fees, especially when they will be funded by another loan of any type where there is interest on the interest, really.

It looks as if waiting a year is the better option, but only you can balance the feeling of SAVING (which is why we are all on this site) and allocating money to your peace of mind ( getting your new mortgage in place and relaxing for 25 years). Think of the nice holiday you can have the following year when you pay the settlement fees to yourself instead.

Best of luck on this one.... I'm in the same boat, but with a bigger penalty (7k) to move before 18 months.

jamesd

That's 3% of the mortgage.

Now you need to guess whether the price of the 25% will increase by more than 2375 over the next year. Then you need to add in the cost of the extra mortgage interest you'll have to pay on a loan taken out today - say 0.25% more on 78500 = 196 a year. So if the 25% increases by 2375 + 196 = 2571 in the next year you're breaking even by changing now. 25% is 35000 so 2571/35000 * 100 = 7.4% increase in property value for you to break even.

You know the local market and what the odds are of your property increasing in value by more than 7.4% over the next year better than I do but it looks to me as though the certain gain of not having to pay the early repayment charge is the best bet.

Would your current lender give you an additional advance at the original rate to cover the 35000 now you have 35k in equity? Or at some higher rate for a year (you're not likely to get the original rate)? Ask them and find out - they are your best option if they are willing to provide an additional advance without upsetting the rate on the original loan.

Deleerious

Thanks James, that's good knowledge. It's made 40k in 2 years but who knows what will happen around the corner?

I think i firstly need to see if Kent Reliance will try and charge me to take the additonal 25% mortgage. Then see if i can re - negotiate based on what in theory will be a 100% mortgage though it wont as i already own 75% (if you follow?).

Good advice chaps!

Many t's

Deleerious