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Mortgage advice please/WWYD?

9 replies

spp92 · 15/09/2024 20:17

Hey! I’m waiting to speak to a mortgage broker about this but trying to get some options in my head before that. I’m a first time buyer, my partner owns an inherited property so we’re both pretty new to mortgages and feeling a bit clueless.

basically, we’ve had an offer accepted on a house. We have approx 50k, but we’re liable to additional stamp duty of 22k due to owning another property. We also need to keep 10k back for fees and a payment above the valuation as our offer was over the asking price. This leaves us 18k. We can either try and go for a 95% mortgage, or remortgage a small portion of the owned outright property to bump us up to a 10% deposit. I have no idea if it’s better financially to remortgage and hopefully get a better rate on that amount, to offset the slightly higher rate we’re getting on the main mortgage…

with a 5% deposit, we’re looking at interest rates of approx 5.35%. With 10%, we can get approx 4.5%.

basically, what would you do with the breakdown of that 50k, and potentially remortgaging a mortgage free property? Any ideas I haven’t thought of would be amazing! Appointment with the mortgage broker is this week but I’d like to be prepared!

OP posts:
alpacachino · 15/09/2024 20:25

spp92 · 15/09/2024 20:17

Hey! I’m waiting to speak to a mortgage broker about this but trying to get some options in my head before that. I’m a first time buyer, my partner owns an inherited property so we’re both pretty new to mortgages and feeling a bit clueless.

basically, we’ve had an offer accepted on a house. We have approx 50k, but we’re liable to additional stamp duty of 22k due to owning another property. We also need to keep 10k back for fees and a payment above the valuation as our offer was over the asking price. This leaves us 18k. We can either try and go for a 95% mortgage, or remortgage a small portion of the owned outright property to bump us up to a 10% deposit. I have no idea if it’s better financially to remortgage and hopefully get a better rate on that amount, to offset the slightly higher rate we’re getting on the main mortgage…

with a 5% deposit, we’re looking at interest rates of approx 5.35%. With 10%, we can get approx 4.5%.

basically, what would you do with the breakdown of that 50k, and potentially remortgaging a mortgage free property? Any ideas I haven’t thought of would be amazing! Appointment with the mortgage broker is this week but I’d like to be prepared!

Get the lowest rate you can

alpacachino · 15/09/2024 20:25

Ah sorry didn't mean to quote the op

RobinEllacotStrike · 15/09/2024 20:31

Wouldn't using the house you own as security let you borrow all you need at a good rate? You are in a much better situation than many who hold a mortgage (security wise) so the banks should all want you as a customer?

Freetodowhatiwant · 15/09/2024 20:32

A good mortgage advisor will be able to tot up the financial benefits of what it would cost you to take out some money from the property you own outright to put towards the new property to see which option makes sense.

One thing - you mention your 'partner' not your husband or wife. I would be very tempted to let my partner own his/her own property outright and buy the new property in my own name. That way you would avoid the higher stamp duty cost and also you have a property each. Much easier if anything goes wrong with the relationship.

RobinEllacotStrike · 15/09/2024 20:36

Yes that's a good point re not being married/legal implications.

Do get proper legal advice OP.

spp92 · 15/09/2024 20:38

Yes, we’re not married but I couldn’t afford the mortgage alone so I don’t think it could only be in my name? If it could and it avoids the extra tax, that would be a massive help..!

OP posts:
AgreeableDragon · 15/09/2024 21:22

Personally I'd be selling the inherited property to buy the new. I'm assuming he'd be renting out that property, but being a landlord these days is a costly minefield. I'd ever want to be a LL again.

Outnumbered99 · 16/09/2024 11:42

Make sure for the appointment with the broker you have all the facts and figures ready much as you have detailed here, and an idea what you plan to do.
Are you wanting to let out the inherited property? Worth doing some research on the reality of being a landlord (even more so if the property has sentimental links) so you know whether this is a route you want to go down.
Many things are possible with the situation you describe, you are certainly in a better position than most hopefully your broker will work well with you for a way forward to get your house!

spp92 · 16/09/2024 13:50

Thanks @Outnumbered99 - have spoken to broker and to avoid the hassle of remortgaging we are looking at a 5% deposit instead. Luckily the property with no mortgage is already tenanted and has been for some time.

OP posts:
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