6yrs 11mths left on interest only - advice please

holly_hobby

Hi,

No the bunaglow my in laws now have is with a Housing Assocation, and wasn't a new build when they purchased their share.

How would they retrieve their capital ?

They would simply give notice to the HA, and the HA would market the bunaglow with estate agts etc, as a shared ownership purchase. It would be marketed saying offering the pch of the 25% share, with the cost to do so equivilent to 25% of the market assessment provided by the estate agt/surveyor, the buyer also has to be status assessed by the HA.

As I say, when my in laws pchd (for want of a better discription) their bungalow, 30k was equal to 25% of the property value. Now obviously the value of their 25% will change (increase in value or decrease) in accordance with either/or the Estate Agts market apprasil and/or a surveyors assessment, if a mge is reqd by the buyer, and/or the buyer wants a RICS survey regardless even if buying for straight cash.

So in my in laws case, lets assume for ease the property has remained static in value (as confirmed by any survey), this means that they would market and sell their 25% share, and recieve 30k from their new buyer (or their estate if sold following 2nd death) - of which they could do with what they want.

How they found their bungalow, simply visited some estate agents, and searched on right move ....

Hope this explains and helps the decision making process !

Holly xx

Dunroamin

Could you move to a cheaper area as well as a smaller property?

pjread

This may be a silly question, but if you did sell and rent somewhere, wouldn't the rental costs be as much or more than the mortgage costs? Plus add all the fun of letting agent fees every 6-12 months, arbitrary "inspections" and the potential for getting notice to leave the property (e.g. because the landlord wants to move in/sell it) or arbitrary rent increases.

I think the previous advice is sound - extend the term and get on repayment, pay as much as you can. If you can, do something to overpay and aim to meet your 7-9 years if you can, and if not I still don't see it leaving you with greater outgoings than renting.

Unless you mean renting at the extreme low-end of the market, but that likely won't be fun either and still means near-zero security realistically.

chanz4

This maybe a question you may not like, but to help others why has it been left so close. Also can you not delay retirement

silvercar

midebt wrote: »

thanks
if we sell ...our property for 120'000....we will pay the 90'000 owed and have 30 left to buy a 'downsize ' terrace / so if we put 20+ deposit ....the property may cost around 75 -80'000 ....so could this be do-able over 7 years ........or not

Do you have a view on house prices over the next 7 years?

If you think house prices will increase it may be better to remain where you are for a few years as the increase on a 120k property will be more than on a 75k property, giving you more equity when you do trade down. If you think house prices will fall the opposite is true.

Over paying the mortgage now is little different to moving to a repayment mortgage when you move.

Shared ownership has its merits, but the choice of property may not be that great. Round here shared ownership properties are only found on shared ownership estates, most are occupied by young families starting out and tend to have a large number of young children running around - not ideal retirement living.

midebt

so ive done a budget plan ....

the disposable income left each month,,,,

would be 160.00 week =640.00

our current mortgage interest free is 350.00

is this any help ....???

midebt

Goldiegirl wrote: »

I would suggest downsizing as soon as possible, and paying as much money as possible to the new smaller mortgage, to pay it off ASAP.

It might mean living frugally, but there it plenty of help with that on MSE.

But al least it would mean that you have a home when you retire, with minimal housing costs.

Failing that, I think you'd have to accept you can't retire when you want to, and carry on working until your current mortgage is fully cleared.

yes we would be prepared to live frugally - just to be reassured that the mortgage will be paid at end of term

Imma_Number

Your interest only of £350 + your budget of £640 comes to £990.

In order for your mortgage to be paid at the end of term you'll need to match the repayment amount of £1,268 (assuming interest rates don't rise)

That's an extra £280 pcm to find, every month.

ValHaller

midebt wrote: »

so ive done a budget plan ....

the disposable income left each month,,,,

would be 160.00 week =640.00

our current mortgage interest free is 350.00

is this any help ....???

£990/month would see the mortgage clear in 9.2 years. I would go for it and see what happens. At 7 years, you might not need to downsize too much.

silvercar

ValHaller wrote: »

£990/month would see the mortgage clear in 9.2 years. I would go for it and see what happens. At 7 years, you might not need to downsize too much.

I agree. At 7 years the capital outstanding would obviously be small and possibly less than any moving costs you would face.

One thing to bear in mind is your current mortgage deal. Interest rates are very low at the moment, if you are not on a fixed deal an increase in ratees could effect your ability to pay off the capital.