Want to borrow more, overpay to ensure?

holidayhippo

The mortgage has only just completed, but I suppose its never too soon to plan!

House was bought with partners mums name on the mortgage (she still owns half)

When the current deal comes to an end 2 years, the plan is to buy her out at £42,500 although we have paid £1,400 already and plan to pay £200 per month for the next two years

Mortgage is currently at £42,500 20 years @ £225 pm.

Should we pay around £250pm in over payments to the mortgage to show we can afford the extra borrowing, or to his mum so we are asking to borrow less, or £125pm month to both? OR Just pop in in savings?

At the moment we can afford the extra £250 in over payments however haven't made an agreement with his mum to pay more or put mortgage monthly payments up just in case one month we need that money.

Thrugelmir

What rate of interest are you paying?

holidayhippo

2.49

No interest being charged on that we pay his mum.

getmore4less

Don't forget the CGT check when you buy her out.

Over pay the mortgage that has interest although you may feel obliged to repay the family debt first.

Do you have £200pm or £250pm or £200pm+£250pm to overpay.

£4800 or £6000 or £10800 big difference

In two years you will still have over £39k on your bit or if you overpay less.

Work out your debt intwo years based on overpaying mum or mortgage.

Then have a guess at LTV for a re mortgage.

What's the follow on rate?

holidayhippo

getmore4less wrote: »

Don't forget the CGT check when you buy her out.

Over pay the mortgage that has interest although you may feel obliged to repay the family debt first.

Do you have £200pm or £250pm or £200pm+£250pm to overpay.

£4800 or £6000 or £10800 big difference

In two years you will still have over £39k on your bit or if you overpay less.

Work out your debt intwo years based on overpaying mum or mortgage.

Then have a guess at LTV for a re mortgage.

What's the follow on rate?

What is CGT?

£200 to Mum £31,500 £39,137 = £70,637
£200 to mortgage £36,300 £34,210 = £70,510

Having a LTV of 70/75% we following deals would be on the table 2.59% for 2 years, 3.69% for 3 years

There isn't much in it as the same deals are on offer from the bank which ever one we choose. So which one would you advise would put us in the best stead with the bank? borrowing less or seeing that we've overpaid?

I understand that £4800 or £6000 or £10800 big difference. We have been paying £400 rent pm so in effect it would cost us £225 more to pay our mortgage £225, £200 to his mum and £200 overpayments somewhere.

I spent considerable amount of time trying to do a cash forcast for the next 12 months and I feel that we should be easily be able to afford the extra repayment.

getmore4less

capital gains tax

holidayhippo

getmore4less wrote: »

capital gains tax

Why would it be Capital Gains Tax?