‘Can I lower my monthly mortgage while I’m trying to sell?’

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Ellen Hambly, 36, works for a media agency and is in the process of trying to sell her studio apartment. Blackheath to be able to live with his partner and his two children.

“I have done the flat with a new bathroom, kitchen and a pull out bed to increase the space. Two minutes away Greenwich Parks, however, after foreclosure, apartment buildings are more difficult to sell.”

Helen has had two buyers fall through and has been selling the flat for over a year, so she has reduced the price by £10,000 to £240,000. .

“I feel like I followed all the rules and saved to get myself on the property ladder and now I’m here to sell, and I can’t.”

In addition to stopping Helen from moving forward with her plans, this delay has cost her dearly. Her low-interest mortgage expired last year and, while she was selling, she didn’t sign up for a new deal but instead went to a Standard Variable Rate individual. debtor.

Since the Mini Budget, his interest rate has nearly tripled, increasing his monthly mortgage payments by around £300. “With bills, I’m spending £1,500 a month when I could be saving for a new house. I’d like to know if there’s anything I can do to lower my monthly payments while I’m at it.” I keep trying to sell.”

The details

  • Prices paid for apartments in August 2017: £216,500
  • Previous mortgage rate: 2.1%
  • Last month’s salary: £775
  • Current mortgage rate: 6.25%
  • Current monthly payments: Over £1,000
  • Mortgage balance: £142,000

The advice

Simon Gammon, Managing Partner at Knight Frank Finance, said:

First, I recommend that Helen check with her current lender to see what they will offer on an exchange rate product. It will be cheaper than the lender’s Standard Variable Rate and there will be no penalty, so when Helen finds a buyer, she can sell it for free. However, Helen should be careful to check whether the borrower pays a fixed fee for taking a new product.

If Helen’s current partner doesn’t have a viable option, she could look at remortgaging. Some lenders offer free remortgage, and I would also recommend going with a mortgage tracker with no early repayment fees. The savings Helen is happy with depends on how long it will take to sell, but she will see a decrease in monthly expenses. That drop will come sooner if Helen stays on her current loan, and I recommend acting now rather than waiting for a sale.

Felicity Holloway, head of mortgage to the Cashier:

Helen’s condition is unusual and can depend on the type of land and its location. Trying to match a real estate sale with when your mortgage is due can be tricky and can lead to a few expensive months on the balance sheet. the bank’s rate.

Ideally this time Helen will find a customer that is not part of a chain to reduce the risk of having to hold back a sale. He has options about the mortgage: first, he can renegotiate the current rate. Some fixed deals have an early repayment charge (ERC) that Helen must pay if she enters into a new fixed mortgage and sells the house.

However, there are many flexible products available without ERCs that can offer Helen a lower price, thus reducing monthly expenses. Overall, prices are higher now than when he agreed to his first 2.1 percent. However, I recommend that he discuss his situation with a mortgage broker who can analyze the entire market and recommend something else to him.

You should seek independent advice from a qualified professional before acting on any information contained in this article.

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