General Discussion: mortgage help

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phish avatar

271 posts since 5/1/10

2 Jun 2016 05:46
buying a gaff that needs completely overhauling and updating before moving in.

want to cut my deposit from 25k to 20k and take a bigger mortgage with rates being so low at the moment. is this a pretty common approach or should i look at interest free cc instead etc?
jeg avatar

2266 posts since 12/12/01

2 Jun 2016 10:22
Adding £5k to the mortgage will be pretty small PCM addition, but over 20/25 years will add a few £k in interest. If it was me, I'd check the payments needed on the cc - then its paid off sooner. Sainsburys do an interest free over 24 months which would be £208 per month pay back if you did a full £5k, though check if they will give you a £5k credit limit though in the first place
Dee avatar

11291 posts since 22/11/07

3 Jul 2017 12:55
About to remortgage this week - plan is to go interest only for a 2 year period, plenty of equity in the property, then will likely remortgage the property again in 2 years as a buy to let on a repayment or sell it and cash in. Aim is to have a short sharp savings plan to raise more cash, let it out and bolster that plan or ride it out for another 18 months and have a healthy deposit for another place/sell it/upgrade.

The bank are asking what the plans are to repay the capital, even though they know there isn't really a financial plan in motion - There's enough equity in the property to settle. What should I be telling them, she's a bit of a jobsworth, not like it was years ago?
pops avatar

4065 posts since 2/9/09

posted 5 Jul 2017 07:01, edited 5 Jul 2017 07:01
I'm also toying with the idea of moving to interest only .the plan is to mitigate my tax position by maxing out my pension contribution every year to the full tax free amount (£40k) by using the amount saved on the mortgage capital payments. The plan would be to repay the capital by taking a tax free lump sum (up to 25% of your pot ) out of my pension at 55.

Not spoke to a financial advisor yet but seems to make sense ! Might be worth spinning that one to the bank

Either that or tell her you'll be buying less Visvim Laughing out loud

jamintoons avatar

16 posts since 21/11/13

5 Jul 2017 08:07

Worth considering that the right to take a tax free lump sum could easily be removed at any time and has been rumored to be on the cards for some time.
Dee avatar

11291 posts since 22/11/07

posted 5 Jul 2017 13:29, edited 5 Jul 2017 13:29
I think we are going to stick monthly savings into a couple of ISA's, would this be enough to convince the bank if we say the purpose is to repay capital? 2 years down the line we have the options to withdraw the savings, sell the place or remortgage with healthy equity. Sounds like a sensible thing to do - just don't know anyone who's done this before.

Without a pension on my side so not sure it's a good route to go - another reason to keep the place and let it out.