Selling house and paying early redemption charge

marc5180

Hi guys just a quick question really. Me and my partner bought a house 3 years ago on a 30 year mortgage, fixed for 5 years. We have decided to sell up and pay the mortgage back and rent for a while. How much of a penalty charge will we have to pay back to Northen Rock to pay off the mortgage completly? The loan on the mortgage was 117k?

Generali

marc5180 wrote: »

Hi guys just a quick question really. Me and my partner bought a house 3 years ago on a 30 year mortgage, fixed for 5 years. We have decided to sell up and pay the mortgage back and rent for a while. How much of a penalty charge will we have to pay back to Northen Rock to pay off the mortgage completly? The loan on the mortgage was 117k?

What do your T&Cs have to say? AFAIK it depends on the product you took out.

kingkano

You would need to check your mortgage contract for the exact amount. It's likely to be in the realm of 4 or 5% of the original loan value. So around £4680. You might want to reconsider on that basis?

Gorgeous_George

The questions that you need to answer are:

1) What is the redemption charge? (It depends on the product and could range from 0 to 5%, I'd guess at 2%).

2) What do you think will happen to house prices between selling and buying again?

3) What do the other costs of selling, renting and buying again amount to? (If indeed you decide to buy again).

Good luck with whatever you decide to do.

Just a thought: Buying a house is probably the biggest financial commitment that you might make but you can buy your way out of this one relatively cheaply when you change your mind. If you have children, the rates are fixed for life and there is no early redemption option.

GG

marc5180

Generali wrote: »

What do your T&Cs have to say? AFAIK it depends on the product you took out.

T&Cs????? AFAIK???? Sorry not sure what these mean?

marc5180

I have just sold a 2nd house that i bought to do up and sell and i made 12k in profit. The house that we live in is a 2bed small semi. For us to geta bigger house in the same area it will cost in excess of 50k++...
My idea is that the money that i have and i could get from the sale of our house could be 20k+. We could rent for a few years and have a bigger house for the same money that we are paying now to our mortgage,whilst saving as much as we can ready for when we see a house that we can afford. Or would it be better to pay the money from the sale of my other house and overpay each month ??

Cozworth806

I would phone up Northern Rock and ask for a redemption figure for the mortgage so you can do your sums about how much you are liekly to get after all costs are deducted such as estate agent solicitor and mortgage etc.

We sold our house for a £66,000 profit after 7 years and are now renting a house that would cost us £50k more than we could afford. The rent is only £100pm more than we were paying for the mortgage after the money has been invested.

Gorgeous_George

T&Cs = Terms and Conditions. This is where you will find the detail of your contract with the building society

AFAIK = As Far As I Know

GG

p.s
GG = Gorgeous George

p.p.s
p.s = post script

p.p.p.s
p.p.s = [etc.]

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etc. = etcetera



p.p.p.p.p.s
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marc5180

HaHa thanks GG

Gorgeous_George

marc5180 wrote: »

HaHa thanks GG

Come on, catch up. You mean LOL.



GG

Generali

marc5180 wrote: »

T&Cs????? AFAIK???? Sorry not sure what these mean?

1000 apologies. It's easy to end up using a shorthand that leaves others out. GG has cleared things up while I was watching the football I see.