Mortgage help please??

RedDay96

I am currently selling my first house,  I was hoping that I would be able to port my mortgage (which is currently on a 5 year fix) but the lender wants a 15% deposit. My options are to pay 15% or a £4,700 exit charge.

The house is £285k so the extra deposit is £14,250 (5%). 

Originally I was hoping to be able to put down a 10% deposit, which would allow me to do the building work required to the new house as well as pay off a £10k debt I have due to a family member by late 2023.

I ended up applying for the 10% mortgage which allows me to keep the 10k set aside but recently I thought what if I put the £10k towards the deposit and port with a 15% deposit (including the £4,700 charge I wouldn’t have to pay). However the risks are that firstly there is no guarantee that my house will rise in value which I would need it to in order to take the £10k out in a few years to repay my family loan. Secondly I am 3 weeks from completion so I feel like it could be risky to risk my current accepted offer with the new bank, for the port.

Overall I work out that I will be £4,800 better off (£3,800 net of fees on saving the EEC, and £1,000 on reduced mortgage payments due to increased deposit).

Hopefully I have explained that okay - what do you all think I should do? Play it safe with the offer I have and pay the EEC in order to keep the £10k in the bank now, or put the £10k into the deposit so that the EEC isn’t payable, and then withdraw the £10k at the next remortgage?

Thank you!

amnblog

Baffled how keeping £14,285 extra cash at a cost of £4,700 can make any sense.
I imagine also that your current 85% LTV mortgage rate will be a chunk lower than the offered 90% rate.
Keeping on the 15% deposit rate will be simple and will not delay anything.

lonibra

amnblog said:

Baffled how keeping £14,285 extra cash at a cost of £4,700 can make any sense.
I imagine also that your current 85% LTV mortgage rate will be a chunk lower than the offered 90% rate.
Keeping on the 15% deposit rate will be simple and will not delay anything.

But I heard that banks don't allow deposits that are a loan from family? Isnt that what the 10k is?

Edi81

I read it that the £10k owed to a family member is separate. Has it been declared as an outstanding to the lender though?