Any advice greatly received

fishie

Morning from a newbie to this site:T

A question to to the forum, my situation is about 18 months ago we locked our savings into to 2 high interest accts with a locked in clause. Since we had no intention of using these for 5 years it seemed ok. The problem is a house which would be our forever home has come onto the market and at a price it is difficult to refuse, we have had an offer on ours and totaling up our spendinding we are £40,000 short. Up to this stage we have been mortgage free for 9 years. After approaching these companies to release the cash they have both straight refused and 1 stated that its for 5 years and only death would release us:mad: so we are now in the position of getting a small mortgage for the amount but it riles me on 2 fronts

Mortgage having tried applying online you cant be an owner occupier and be a first time buyer and if i apply for a normal mortgage i cant be an owner occupier without a current mortgage !!!!!! :j

We have money to clear the difference but cannot gain access for 4 years :mad:

I know its my fault for being greedy but any advice about this situation would be greatfully received

kingstreet

Is the issue the savings accounts or the mortgage?

Mortgage having tried applying online you cant be an owner occupier and be a first time buyer and if i apply for a normal mortgage i cant be an owner occupier without a current mortgage !!!!!!

If you own a property, you aren't a first time buyer. You are a subsequent purchaser, or home mover, with no mortgage. I don't know which lender's system you are using, but you are in a large group of potential borrowers, property owners who have an unencumbered property.

If you can't "unlock" the savings, you need a mortgage. Not much more to say, unless you want to be more specific?

fishie

Thanks for the swift reply:)

Its a bit of both really, i am ringing the Nationwide in a while about the mortgage, but its quite galling that we have £80,000 in a 5 year fixed term bond which matures in 2017 which would negate the mortgage application, etc....

The house needs work and i would much rather be paying a loan for the remedial works than paying a mortgage. :j:j

R_P_W

fishie wrote: »

Thanks for the swift reply:)

Its a bit of both really, i am ringing the Nationwide in a while about the mortgage, but its quite galling that we have £80,000 in a 5 year fixed term bond which matures in 2017 which would negate the mortgage application, etc....

The house needs work and i would much rather be paying a loan for the remedial works than paying a mortgage. :j:j

Why? Surely you will get a cheaper level of interest on a mortgage than a personal loan? Then when your money is released pay it off

kingstreet

I agree. The rate for the mortgage will be lower and the term longer. It only costs you more if you keep it for that longer term.

If you take the mortgage over a long term and pay the same amount each month as you would have paid for a personal loan, you pay a lot less interest and pay it back faster than you would have done by going the loan route.

For example, a £30k mortgage over 25 years would cost £142.26 each month, assuming a five year fix at 3%.

Let's say a theoretical personal loan of £30k would see a rate of 8% with a maximum term of seven years. The monthly repayment would be £464.

By making the £464 a month repayment to the mortgage, £142 contractual and £322 per month overpayment, you'll repay the mortgage in five years and ten months.

By having a lower interest rate, you'll pay the same amount as for the loan but pay it off fourteen months earlier - saving yourself 14 x £464 or £6,496.

Obviously there will be mortgage fees to pay, but they should be a fraction of the saving.


... or simply take the mortgage over a short term, perhaps 5 years and pay the normal monthly payment for that, £539.06.

fishie

Just got a provisional approval and applied for a mortgage over 10 years with the view to paying off once the savings mature

Thanks for your help:T