Mortgage quandary - advice needed - help!

Hello all

I need some advice. I have a 2-year fixed rate deal at 5.25% with First Direct - due to end June 2010. It is £110,000 on a property I think is worth about £250,000, though it's hard to tell with house prices dropping all the time.

The problem is that although I am currently on a salary of just over £30,000, over the next eighteen months I shall be reducing my salaried work and slowly becoming self-employed. By June 2010, therefore, I shall probably look on paper like a fairly unattractive mortgage prospect as I won't have employer's payslips to show, and I won't yet have decent audited accounts for my self-employment. My only option then might be to go for a self-certificated mortgage, but the rates are so much worse.

So I'm wondering if I should remortgage now, while I am salaried, to a 5-year deal (I could get about 5% I think) so that I don't have to worry about remortgaging until 2014, by which time my self-employment should look more acceptable. The question is though if it's worth it, given that my penalty for leaving First Direct early is 3% (£3,300) - expensive!

The other factor is that I plan to move house sometime in 2010 (I have been in my current London flat for 8.5 years and I plan to move to Cambridge) - and I know nothing about taking a mortgage with you when you move. If I got a new 5-year deal now, would I be able to transfer it to a new property?

I would be SO grateful for any advice you experienced people could offer me!

Thanks!

Comments

  • dimbo61
    dimbo61 Posts: 13,710
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    Well Elphie 18 months is a long time away and the mortgage market and the housing market may have changed a great deal in that time.
    I would stick with your existing lender and save like mad as well as overpay on the mortgage.
    The hardest time for a new buisness or being self employed is the first year or two so build up your savings and also reduce all your debts to give yourself a fighting chance to make the new venture work.
    If you plan on moving in june 2010 when your existing deal ends then why pay all the costs to move lender
    Just my thoughts !
    Having a £150,000 deposit on your next home will mean you should get a good deal with most lenders
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