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Mortgage shortfall

Last post Sat, Jan 28 2012, 1:24 PM by Zeb. 1 replies.
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  •  Sat, Jan 28 2012, 1:24 PM

    Re: Mortgage shortfall

    Speak to your mortgage lender and ask for the shortfall (or more if you want) to be put onto a repayment basis. Choose the term that you want and go with it that way. Ensure that what ever mortgage product you go for it has absolutely no fees whatsoever. Mortgage lenders will be more than happy for you to take a product with a £999 fee on it and they will sell the benefits of the interest rate over the fees charged. Even a £500 fee (which is low) is nearly 10% added to the loan.

    Find a fee free product (it will be at a slightly higher interest rate (mosty likely 3.25-4.00%)) and let it run for who ever long you want. The mortgage will be fully paid off and the shortfall will be behind you.

    You will never be able to get raise money on cheaper interest rates than a mortgage and assuming you do not look for a long term loan for the £6,000 - £7,000 then it will definitely be the best and cheapest way to fund the shortfall. If you take the loan over a longer term (10-15+ years) then even though you may have far lower interest rates the amount of interest you will eventually pay back will probably be more than you would pay on a short term personal loan or other method of finance.

    Short term mortgage (4-6 years) and you are onto a winner.

    Quick Quote - Just looked through my mortgage sourcing. You could get a 2 year tracker or fixed mortgage for 3.64% with no fees for £127 per month over 5 years or even a 5 year fixed rate at 4.69% with no fees for £131 over 5 years.

    You can easily get cheaper rates than this....but the lenders will charge fees and paying a fee would not be cost inneffective at all.

    Good Luck.

    • Post Points: 5
  •  Fri, Jan 27 2012, 7:59 PM

    Mortgage shortfall

    My endowment morgage is reaching maturity in July after twenty five years and there wil be a short fall of around £13000. I took out an ISA ten years ago hoping for it to pay off the shortfall but I will still be £6000-£7000 short. What is the best way to pay this off? A personal loan, another very short term mortgage, ie 4 years, or a 0% credit card which I will keep swapping to another to keep the 0% deal? Which will be the cheapest or best to go with? Any help will be appreciated. Thanks in advanced,

    Andy24

    • Post Points: 20