Looking for some advice re the following.
We sold our house at a loss of 37,000 in 2015.
Currently stands at 35,000 over another 17 years.
We have savings of 31,000.
We are renting and saving approx 500 per month.
We would like to buy sometime soon in or around the 300,000 mark.
Combined income 94,000.
So the question is should we continue saving or start paying off the negative equity a bit quicker?
Thanks in advance.
Yes house was sold in 2015 so it is an unsecured mortgage loan over originally 20 years. 17 years left. Don't have interest rate to hand. Will dig it out latet.
Credit rating is perfect.
Wife is 42
I'm 43
We have an offer of a mortgage for 235,000 but would need a little more.
Which would look better in the eyes of a lender. More savings or bringing down the above loan?
Same lender.
The mortgage offer isn't enough to buy what we want.
There is a discretionary type application which doesn't require the 20% deposit so assuming we have enough with the 30k should we continue to save or start increasing the payoff on the loan? Which would be more likely to increase a mortgage offer from the lender in the future?
Did the lender indicate they would be willing to offer this to you? They are selective about who gets them, although loan to income is the more difficult one.
Your shortfall loan is costing you about 300 per month repayment. This reduces the amount you can borrow by over 50k.
Paying an extra 500 per month off it won't make a huge difference. Reduce loan by 5k, might increase mortgage offer by 6k...
Edit: suggest if you want to buy a place you need to keep saving. You'll need at least 10% deposit, plus legal fees and stamp duty.
It is a bit unusual but then I'm lucky to have a very strong negotiator in the house!
We'll keep saving so and see what Brexit does.
Thanks for your quick and helpful input.