To Mortgage or not to Mortgage???

PapaBrown

That is the question????

A lovely housing development is being built nearby and we want to buy there. We have seen a lovely house, ready for January to move into and others becoming available over the next 18 months.

We can get a mortgage and have a deposit but the catch is with our current home which we rent. The rental company want a months rent (£1425) plus the money to put it back on the market again (approx £200) as we will have broken the contract early. Naturally we don't want to pay this!

With a General Election tomorrow, my fear is the interest rate will go up and we will be out of pocket to more than the £1600 we stand to lose if we moved in the new year. Should we bite the bullet, stump up the cash to the rentals, and get a mortgage deal we know to be competitive, or wait until our rental contract is up in July 2016 and move after that?

Cheers all

PasturesNew

£200 against the total cost of moving/buying is peanuts. Focus on what you'll gain, not what you'll lose.

KRB2725

Probably a stupid question, but if your rental lease is up in July 2016, is there not a break clause? I have very limited experience with the rentals market but that seems a long fixed term.

PapaBrown

The term is a year but they want your intentions early! It runs from July to July so we have only just signed on again.

It wouldn't be £200 lost, it would be over £1600 for breaking the contract. It's one of those things, we signed on for another year then this was released which we want to buy.

getmore4less

Whats the track record of the builders of completing on time?

Can you see if the builders will reshedule your prefered plot to later?
(some will unless it is a key one to help selling)
Is there another plot due for completion nearer July that you like.

Can you find somewhere to live if you left early? If you can then they might negotiate a remarket and you stay till they find a tenant.

Then they have no losses so the penalty might be considered unfare, what is writen in the agreement.

Check with the property people what the situation is with a rental agreements that do not start for nearly 2 months ahead.

KRB2725

As previous poster has said, check what your rights are with a contract that has been signed two months prior to its start date. If you can 'get out' of the contract then you could possibly go onto a periodic tenancy and just give a months notice when your new house is ready. That would also cover you for any delays in the build.

Alternatively you could ask for a break clause to be inserted into the new fixed term contract - if it is not too late now that it's been signed.

Pixie5740

What if you reserve one of the properties that will be available in 18 months time rather than January 2016?

That way when your current fixed term ends you can just start a Statutory Periodic Tenancy which will give you much more flexibility in case the build is delayed.