£17000 outstanding,Actual end date Dec 2026

talk2me

Hi

I bought this house in January 2002 for £50000,I am paying £1000 pcm towards my outstanding mortgage of £17000 that will finish by Dec 2009 (next year), I definitly want to move up the ladder and buy a new house. But the present credit crunch situation and the history attached to House price falls of (1991) I want to pay off in full and keep this house as back up(be safe than sorry),in case anything undesired happens with my new and bigger commitment . My broker suggested if I leave £500-£1000 on my mortgage and put it back to its original end date Dec 2026 ?

I can't work out the reason why I need to leave this amount on the mortgage before I move on to a nice bigger house and OBVIOUS BIGGER COMMITMENT??

Please guide me to the best course of action.

What are the sort of things I need to look at ?

Am I better off selling this house?

Or Keep it ?:money:

jessicamb

the only reasons I can think of leaving a small balance is that the bank will keep the deeds or that you will face fees if you repay the mortgage early.

I'm not an expert though - hopefully they will have some thoughts soon.

nrsql

What would you do with the house if you don't sell it?
If you are going to rent it out then you might take advice about the tax liability. You can only offset the mortgage interest if the mortage was to buy/improve the house so if you leave the 17k you could end up better off. That used to be the case - not sure if it still is.

The reason for leaving a small mortgage is that the mortgage company would keep the deeds and it doesn't trigger the release fee.

As to whether to sell or not - get a crystal ball.

talk2me

Thanks, talking about tax liability what about transferring this property to my wife's name and letting it out.

KeithEssex_2

nrsql wrote: »

What would you do with the house if you don't sell it?
If you are going to rent it out then you might take advice about the tax liability. You can only offset the mortgage interest if the mortage was to buy/improve the house so if you leave the 17k you could end up better off. That used to be the case - not sure if it still is.

The reason for leaving a small mortgage is that the mortgage company would keep the deeds and it doesn't trigger the release fee.

As to whether to sell or not - get a crystal ball.

Storage of deeds is now not that useful as your house purchase will have been recorded at the land registry. I don't store mine in the Bank. If you had purchased the house a long time ago and this was not the case then it would be of value.

I would personally always clear your debt asap.

Not a great time to sell - but it can still be done. The major point in today's market is not to over-extend yourself.