Advice required

ginger_ninja_4

Hi all,

New poster on here and some serious advice needed. My wife and I bought our first house (3 bedrooms, nice area, good schools etc) in April 2007 for £168,000 and saved really hard to afford a 10% deposit which we were thrilled to achieve. We love our home and cannot see ourselves moving for the next 3/4 years. We have a 5 year fixed rate mortgage expiring in April 2012. Similar houses to ours are now selling for £145,000. What do we need to be doing? Should we start saving and overpaying on our mortgage? What is LTV and how concerned should we be about it? What else can we do? I feel really disheartened that we saved so hard to get our 10% deposit and now we may not be able to move or re-mortgage... am I over worrying about this? Or should I be even more concerned.

Thank you in advance,

Ginge

Lynn11

Im certainly not an expert but if your mortgage allows you to overpay every month, you can certainly do this and it will reflect on the amount of mortgage left on your property when your mortgage deal end in 2012. we have a nationwide mortgage and I was able to overpay the last 3 years - hoping to reduce the term of this but due to jobs not being secure at the moment, we may have use this overpayment for holidays, but our mortgage allows this. I also hope that we have a good variety of deals available in May 2009 when our fixed rate runs out as I have been overpaying for the last 3yrs, It is up to you how you play it if you overpay or if you are able to put into an ISA and save up and then make a lump sum when your deal ends 2012. Good luck.

dimbo61

Read through the terms and conditions of your mortgage and if you can overpay each month and as the advert says ( every little helps )
You can also phone the lender and ask if you overpay can you use this money to have a payment holiday if you need it ( only for job loss and NO other reason )
Have you built up any other savings since you moved in ?
You need to build up a savings pot of 3/6 months of income in cash ISA,s in case of any emergencies.
You might have to miss out on the SKY, nights out and expensive holidays but keeping the roof over your head is more important !
GOOD LUCK
Overpaying by £500 a month would mean you would have overpaid by £20,000 plus interest saved by april 2012.

ginger_ninja_4

Thank you all for your help. I still dont really understand all of this. Could someone please tell me what will happen when our fixed rate mortagage comes to an end in April 2012? Will lenders lend us our mortgage? What happens if we dont overpay? If we just carry on paying back our monthly amount and don't overpay what is the risk and is it worth it? V. confused....

dimbo61

I hope you are on a repayment mortgage ? and if you are then after 5 years you should have paid a reasonable amount off the mortgage and by april 2012 we all hope the housing market has recovered !
At the end of your fixed rate deal you can either go onto the lenders SVR or see what deal they can offer you.
You can also ask a broker to find any other mortgage deals from other lenders that suit your needs.
I mention overpaying IF YOU CAN as a means of clearing your mortgage quicker and paying a lot less interest but you have been wise to take a long term fixed deal and will build up the equity in your home over the next 5 years.
Having a 60% LTV usually gets you the best deals GOOD LUCK