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Additional loan or Remortgage

edited 30 November -1 at 1:00AM in Mortgages & Endowments
2 replies 573 views
benjiibenjii Forumite
25 Posts
edited 30 November -1 at 1:00AM in Mortgages & Endowments
I would be really grateful if you could comment on the following situation.

My wife and I bought 60% of a shared ownership property in 2013 and now after 1 year we would like to buy the remaining 40%. We have two options:

Option 1: Our mortgage lender offered an 'additional loan' product at a relatively high rate of 4.69% to finance this purchase.

Option 2: We've done the sums and we would be better off if we could end our existing mortgage deal (2-year fix at 3.39% running to 2015), pay the early repayment penalty, and switch to a new mortgage deal with the existing or new lender. It would be one mortgage covering the whole property.

Irrespective of the financial aspects, do you think option 2 is technically possible?

Replies

  • ThrugelmirThrugelmir Forumite
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    The second option is technically possible.

    Financially viable is another matter.
    It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong." — George Soros
  • kingstreetkingstreet Forumite
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    The equity you have in the property and/or your savings which will fit the mortgage within the lender's maximum loan to value may be the issue.

    Many lenders won't accept former SO property, even when staircased to 100%, so be careful and don't forget the stamp duty implications, unless a market value election was made at the outset.
    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.
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