Morgtage

bigmock

Hello, im thinking of taking advantage of the council house discount and buying my council property,

I want to pay of the mortgage for five years, sell, repay whats owed on the mortgage or keep whats owed in the bank until its paid off....use the profit towards a new house

I was looking at getting a five year fixed tracker..

I just wondered at the end of the five years if i sold the house what would happen with the mortgage??.... would the back have any issues with me selling before ive paid back all the repayments? or would they just give me a new mortgage deal using my new address details etc??

thanks

ValHaller

Yes, you can do that. Basically a mortgage is when a lender has rights over your property and lends you money based on those rights.

The rights are the right to repossess the property, sell it and take the money to clear the money loaned. This only comes into play if you fail to make the scheduled payments.

If you sell the property, (for enough money) you will be able to pay off the mortgage at which time the lender's rights over the property come to an end. You will get the surplus - or if you buy another house, your solicitor will use the money on your behalf.

Because the mortgage is rights over a particular property, once you pay it off, it has come to an end and you have a new mortgage for the next property.

bigmock

say i sold, bought another house with the profit (no mortgage) could i still pay off whats left each month on the original mortgage like normal even thought ive sold the house i got the mortgage on???

thanks

Yorkie1

No, when you sell the original house you have to repay the mortgage at the same time.

bigmock

so once i sold id have to repay all whats left on the mortgage.....

I would like to sell then repay it all after five years, any advice to which type of mortgages id benefit from

Thanks

ValHaller

If you sell the property, you must pay the mortgage off in full

• No one will buy a house off you if your mortgage lender still has rights over it
• Your mortgage lender will not let you sell without you clearing the mortgage - or more pedantically, you could sell, but the mortgage lender will not relinquish their rights, therefore no one will buy until you clear the mortgage.

ValHaller

bigmock wrote: »

so once i sold id have to repay all whats left on the mortgage.....

I would like to sell then repay it all after five years, any advice to which type of mortgages id benefit from

Thanks

Any ordinary mortgage will do. When you sell, your solicitor will pay off the mortgage and you will only see what is left over.

bigmock

but am i allowed to sell, then clear the mortgage? or do i have to clear it first???

Thanks for all your help

bigmock

should i not go for a mortgage with no early repayment charges???

ValHaller

bigmock wrote: »

should i not go for a mortgage with no early repayment charges???

Let's just sort out the basic concepts?

bigmock wrote: »

but am i allowed to sell, then clear the mortgage? or do i have to clear it first???

Thanks for all your help

Your solicitor will do the actual transaction. The buyer's solicitor will pass the full agreed price to your solicitor who will pay off the mortgage and either pass the surplus to you or put it to your next property together with the loan from your new mortgage.

You do not need to think about the order of doing these things nor about finding the money to pay off the mortgage as part of the sale process.

holly_hobby

I think you mean ....

Can you only fullly repay the mge, when you actually sell the property
OR
if you have the funds (savings, etc) can you repay the mortgage without selling the property.

If so, yes, you can repay your mortgage from any funds you have - be that from savings or actual sale of the property.

You however, can not sell the property, and keep the mortgage going, for the reasons explained above by the lovely Val.

Don't forget that if you sell within 5 yrs of RTB purchase, you will still be within the discount clawback period.

Hope this helps

Holly