how do you get out of a mortgage

[dee2912]

hi i have recently payed a 5% deposit on an apartment an mortgaged the rest althought i want to go to austraila an iv no money to look after renting etc what can i do to grt out of this its only after being build so there is guna be few for sale so value is guna be low at present time

[brachiopod]

If you have entered into a Contract of Sale - in other words, "exchanged contracts", then you will lose your deposit and may be liable for other costs incurred by the the vendor, irrespective of whether the property has even been built or not!

If you have just lodged your deposit with your solicitor and signed the documents in preparation for 'exchange', then you should instruct your solicitor to halt procedures now, as you may be able to walk away from the sale without penalty - providing you haven't signed any other commitment to complete when the developer showed you his flashy 'computer generated image' of the finished apartment.

Buying a property can be a big commitment - though not necessarily life-shackling - however, it does help if you have a basic grasp of the procedures involved, where you are in that process, and what you have signed / committed to.

[dee2912]

hi yes i have signed a contract an already paid my first months mortgage

[brachiopod]

Right, I took deposit to mean the sum you deposit when you commit to the purchase at Exchange of Contracts prior to completion.

What you mean is that you stumped up 5% of the purchase price and borrowed the rest. In other words, you owe your lender 95% of the original purchase price, irrespective of what the property is now worth.

If you sell the property, you must repay this to the lender (in practice, any proceeds of a sale go to the lender first, and any remaining will then go to you).

So, sell for anything less than you paid for it, and you will be losing money.

Even if you sell for the same price you purchased, or more, then you are still unlikely to get your deposit back by the time you pay legal and estate agents' fees and pay back the lender, which may well include additional exit fees and early redemption penalties.