Mortgage advice - Repay shared equity or wait

wardo12

Hi



It would be great to get some opinions of some mortgage savvy people here.


Basically, we bought a house 7 years ago with 15 shared equity. Not something I would do now, but we wanted to keep mortgage payments low at the time.


So we own 85% and the finance company provided by the builder owns 15% of the value. If the value goes up, we repay more. If it goes down, we repay less. We bought he house for £160k. It's probably now worth around 180k.


It's now time to remortgage and I've got the option to keep the shared equity in place and repay it seperate from the mortgage through my savings. I do have plenty of savings to do this.


Other option is to get a bigger mortgage and repay the shared equity now by using money from the remortgage. Mortgage payments will go up but at least we will only have 1 debt.



The thing that makes me wonder what we should do is all the uncertanty with Brexit. It may be a bit stupid repaying now before a potentially big change that could effect house prices. But maybe I should just get it out of the way now.


Please let me know your thoughts.


Thanks

Sibz

What (if anything) are you paying against the shared equity amount at present? (is interest accruing?)
Bear in mind that Brexit could affect house prices positively or negatively - so either way that's guess work.
Is there a requirement for a valuation at the point you want to pay back the shared equity? If so - who does this - if during a remortgage - would both parties go by the banks valuation?

Can I ask why you wouldn't go down the shared equity route now? (considering this at present)

wardo12

[FONT=&quot]There is no interest at the moment but the interest free period will end in 2 years. After that, interest will start at around 10% so I would want to pay it before then anyway.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Yes you need an independent valuation done if paying off separately. If going through the mortgage, it seems like they accept the lenders valuation but I need to clarify this. My mortgage broker seems to think I need a separate valuation.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]I wouldn’t do shared equity now because the hassle of paying it off and I simply don’t like having debt in another place. I've also got no idea if it's made us better off or not, so it just complicates things. Overall though, I wouldn’t necessarily advice against it if you thinks its right for you.[/FONT]

Thrugelmir

wardo12 wrote: »

[FONT=&quot]There is no interest at the moment but the interest free period will end in 2 years. After that, interest will start at around 10% so I would want to pay it before then anyway.[/FONT]

Might as well wrap it up in the remortgage now while interest rates are low. You can then fix the rate well beyond any Brexit impact whatever it might be.