Question about my mortgage.

airhorn

Ok, as stupid & all this question may seem to some of you, its one im loseing alot of sleep about lately. My situation is my wife & myself bought our house 2 years ago for 200,000 euros, we put down an 80,000 deposit & borrowed the remaining 120,000 from KBC bank, unfortunetly at the time we took the advice of the bank & fixed our mortgage on a fixed rate for 3 years.

We are currently repaying 700 euros per month based on a 35 year mortgage, which when paid off will be just under 300,000 euros repayed to the bank.

Now what we are wondering is, if we decide to sell the house next year for instance & get the 200,000 back that we pay for it, do we owe the bank the original 120,000 that we borrowed or do we owe them the 300,000 that we would have had to repay if we stayed in the house for the 35 years.

Some people (friends) tell us we would just have to repay them the money we borrowed plus pay a small penalty as we would be breaking some sort of a contract,

Does anyone on here know what the exact story is with this. It would mean alot to us to know if we owe the bank the 300,000 euros or the 120,000 euros that we borrowed.

Cheers!

Rulmeq

You can ring the bank and ask them for the repayment figure, interest is front loaded on mortgages, so the amount you will have to pay will be close to 120k. The 2 years of payments will have been mostly paying interest and barely chipping away at the borrowed sum.

The 300k figure would be the total you would have paid if you kept paying for the 35 years, not what you owe them now.

penexpers

If you redeem your mortgage during your fixed rate period (i.e. in the next year), it will cost whatever capital balance is left and a breakage fee (you need to pay a fee to break the fixed rate).

If you redeem your mortgage outside of a fixed rate period, then you will only pay whatever capital balance is left.

Either way, you won't pay the full 300,000.

Rulmeq

Some of those fees are punitive though, so best to wait until the fixed period is over - at the very least talk to the bank and find out how much they are going to charge.

airhorn

So basically what ye'r saying is, we aint going to get back any of the 80,000 deposit we put down on the house..... thats all we want to know really, thanks for the answers by the way!

Rulmeq

airhorn wrote: »

So basically what ye'r saying is, we aint going to get back any of the 80,000 deposit we put down on the house..... thats all we want to know really, thanks for the answers by the way!

That's a very different question. If you sell today and get less than 200k for the house you will have lost money, that's not the same question as what you owe the banks.

airhorn

Rulmeq wrote: »

That's a very different question. If you sell today and get less than 200k for the house you will have lost money, that's not the same question as what you owe the banks.

Well if we sell the house for 200k & if we only need to repay the bank the amount we borrowed off them (120k), does that not sort of say we will get back the amount we deposited (80k), thats why we would like to know how much we owe them....basically the amount we owe them would determine if we get back our deposit. I'll take your advice & ring them alltogether.

Sponge Bob

It says nothing of the sort , the bank gets the first 120,000 or slightly less because you may have paid something off .....and you get whatever is left over in cash.

If the house eventually sells for 100,000 and not 200,000 you would have to make up the difference of 20,000 between the loan amount and the sale price ... or the bank will not let you sell it.

smelltheglove

airhorn wrote: »

Well if we sell the house for 200k & if we only need to repay the bank the amount we borrowed off them (120k), does that not sort of say we will get back the amount we deposited (80k), thats why we would like to know how much we owe them....basically the amount we owe them would determine if we get back our deposit. I'll take your advice & ring them alltogether.

I've sold 2 houses so my experience is this, first you employ an auctioneer, the auctioneer takes the deposit for the house purchase from the potential buyer. Out of this they take their fee and send the rest on to your solicitor upon sale. The solicitor deals with your bank. Now say you paid 220k and you sold for 200k now, you have paid 2 years of mortgage payments it is safe to say you may have only actually paid 1k off the capital of your mortgage loan. So say the auctioneer charges you 1% which is 2k your solicitor ends up with 198k. The solicitor pays off the bank your 119k mortgage now down to 77k, they then take their fee, say 3k and you end up with 74k.

So if you have made profit you sold for 240 the auctioneer gets 2400 your solicitor ends up with 237600, pays the bank their 119 and takes a 3k fee for themselves you end up with 115600.

Both times I sold I broke the fixed term, neither time was I charged a fee although each time I was getting a new mortgage so it was waived. Unlikely for it to happen now but you can always try and negotiate with the bank.

dudara

Moved to Banking & Insurance & Pensions

dudara