Lease extension - remortgage or loan

Clive_Woody

luckylucinda123 said:

Personal loan - 2.9% APR over 4 year term > total repayment £15,893. Monthly cost of £330, affordable at present, however would impact ability to save any further 
Mortgage - at new mortgage value of 2.02%* APR  over 23 year term > total repayment £18,730.  Mostly cost of £65, no impact on monthly budget
*Currently mortgage rate of 1.99% fixed until 1st Jan 2021, concerned that there may be exist fee for ending this current mortgage, and also that by extending I will incur a fee that I might not have as may possibly be selling the flat in the next couple of years. 

Not sure with the loan option how you would end up paying back less than the £16,000 you borrowed - might need to check those figures. As already mentioned, with the mortgage option you could overpay and reduce the term of the loan...and therefore the interest paid.

Usually exiting a fixed rate mortgage deal early will have some sort of fee associated with it, plus new mortgages often have an application fee too. You could try asking you current lender if you could remortgage with them and what the fees would be. you also need to consider LTV and whether there is sufficient equity in your property to cover this additional borrowing.

austinemerycox

Hi All,

We are looking at buying our first house which is a shared ownership property.

The financial details are as follows:

Tenure: Leasehold, 71 years remaining
Full Market Value:£375,000
40% Share: £150,000

Minimum deposit £15,000

Rent: £358.11

Service Charges: £46.54

99 years from 11 December 1992

Our deposit is £22.5k, we have fairly stable credit ratings & some outstanding debt on credit cards/loans, we earn enough to cover the combined mortgage/rent & service charge payments but the main problem we are experiencing is obtaining a mortgage based on the length of the lease remaining.

The question we have is who is responsible for extending the lease?  The housing association that you pay the rent & service charge to? The existing owner? or us as the potential buyers?

I did look on the MSE website about lease extensions but it referred to flats with leases, I wasn't sure if the principle is the same for shared ownership houses or if different rules apply?