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Should I pay £9000 against mortgage or keep as cash deposit?
Beaks999
Posts: 14 Forumite
Hi,
I would like some advice if possible, my current mortgage is with NRAM, amount outstanding is roughly £76k, interest rate is 4.54%.
We have been given £9000 towards a deposit for a new property. This is earning a pittance in a savings account but it occurred to me that we might be better off paying it straight to the mortgage company as a lump sum, this would reduce the interest element on each monthly payment but I'm not sure how much by. We're already making substantial monthly overpayments which we would continue.
Our property is up for sale at the moment and I was keeping the money aside as i thought it would look better for a prospective lender to have the cash, rather than having equity in the property - which there is hardly any of at the moment.
I would really appreciate some advice.
Thankyou in advance
I would like some advice if possible, my current mortgage is with NRAM, amount outstanding is roughly £76k, interest rate is 4.54%.
We have been given £9000 towards a deposit for a new property. This is earning a pittance in a savings account but it occurred to me that we might be better off paying it straight to the mortgage company as a lump sum, this would reduce the interest element on each monthly payment but I'm not sure how much by. We're already making substantial monthly overpayments which we would continue.
Our property is up for sale at the moment and I was keeping the money aside as i thought it would look better for a prospective lender to have the cash, rather than having equity in the property - which there is hardly any of at the moment.
I would really appreciate some advice.
Thankyou in advance
0
Comments
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If you are moving shortly what is the point? any financial benefit will be negligible.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Thankyou for your response, although it hasn't really helped as I was asking how much difference it would make0
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To your acceptable to a new lender?
Probably very little, again negligible.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
If you have (for example) a 10% deposit, the lender doesn't really care if it's 50% from "savings" and 50% from equity, or any variation thereon. You simply need a 90% mortgage and that's about it.
Assuming you have 20 years remaining, the monthly cost saving on repaying that £9,000 of your existing mortgage is £57.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Interest wise pay off your existing mortgage.
No difference to a new lender whether it's cash or equity. If it's all going into the new property to form part of the deposit.0 -
Keep it as cash - just in case.0
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