selling house during mortgage early repayment penalty period - any thoughts?

[calculatorsatdawn]

I bought my home about a year ago (as a first time buyer) and I got a mortgage from the Halifax. It has turned out to be the worst decision of my life. I have never been happy there and seem to spend all my time living at DPs just to avoid setting foot in the place. I want to explore my options for selling up and going back to renting. Has anyone else done this and know what the implications are from a mortgage perspective? For example have I actually paid back any capital in the last year or is it all interest? There is a penalty for repaying early (x% of the amount borrowed less any capital repaid), but am I likley to incur anything else over and above the amount I borrowed? I have an appointment with the Halifax on Saturday to discuss my options but I would value anyone's thoughts on this who have been through the same process.

Your early repayment fee will be specific to your mortgage. Have a look through your paperwork and it will tell you somewhere.

It's likely to be a percentage of original the loan.

The fee won't be 'less any capital' repaid but you will only have to repay what is still outstanding. You will have repaid some- it won't all have been interest (assuming it isn't an interest only mortgage).

This big question is how much is your house worth now compared to when you bought it?

If it's the same or more then you'll likely have enough equity in it to pay the fees but if it's worth less you would have to find the funds to pay the charges if there isn't enough left over after selling (remember you'll incur estate agent and solicitors fees when selling too).

Thanks Bear. I bought it at auction and have done quite a bit of work to it plus the value seems to have gone up in general despite that so hopefully I should get slightly more back than what I've put in, but realistically I just want to get out.

You need to get it valued in order to make a decision. Unfortunately you may not get back what you've spent on it.

Also, it's often the case that houses which have gone to auction have been difficult to sell for one reason or another so that might affect the current value.

Once you've got a valuation and know what your early redemption fee, selling costs etc would be then you'd be able to decide if it's the right thing for you to do.

there is also Estate Agent and Solicitor Fees for selling, Have you considered getting a tenant in the property?

Rent it out. In the long term property is unlikely to fall and you'll have an income and be on the property ladder. If you sell it you lose all that you have paid to buy it e.g. interest on the mortgage, fees for solicitor, surveyor, mortgage etc.

It's not quite as easy as just renting it out.

You are supposed to have a buy to let mortgage in order to rent a property (although I know many people don't) but you really have to ensure you have the required gas safety certificates and insurances.

Then you've got the tax returns and maintenance costs to think about.

Being a landlord can be a whole heap of hassle if you've not really planned to do it.

Yes, that is true you would have to let your mortgage company know. The hit on the early repayment fee is likely to be at least 1% of the mortgage balance and could be more.