Really seek advice on best option!?!

sheenp77

Hi.
Im in a situation where i have a few options available to me and im looking for some advice. I will start from the top. I bought a house 20 months ago on a 100% mortgage for £90000. its £540 a month on repayment. at that point we had 2 children. Now we have just had our third and final child. the house is 3 bedroom house and isnt really big enough for all of us. im not that worried about the house loosing much value as it backs onto a lovely river and is a good selling point! I have the mortgage with mortgage express. since buying this house i was on a basic salary of 25500 and we managed comfortably. I have since moved closer to home with work and saved around £1500 fuel a year and the job is 32000 basic salary. With the basic overtime that is required its just over 35000. We're looking to move to a 4 bed detached or semi detached house. looking at £130000 to £150000.
I was a first time buyer when buying his house 20 months ago. it was a 5 year fixed rate at 5.9%. We still have just under 3.5 years left on this rate with them. I was wondering if mortgage companies would lend more money so we could move before the deal is up? I also have a loan thats got 6000 left with the tsb, its just over 200 a month. should i get this sorted asap first? if i did currently we have around 450 spare for savings a month. thats after everything (food, andmisc sending). then it would be 650 a month. Im really stuck with all these decisions and dont really want to ring my mortgage company un prepared.
any advice would be most appreciated!
Cheers Steve

_Andy_

Hi Steve

How much deposit will/would you have?

herbiesjp

Have you received a letter from MX explaining that they are waiving the Early Repayment Charges i.e. you can get out of your current deal penalty free within a certain timeframe?

Do you have any savings/funds to put down as a deposit on the new property? How much?

The loan will reduce your mortgage power - the fact you have 3 children will also reduce your mortgage power with a lot of lenders.

I think it may be worth talking to a professional in order to look at in detail what figures you have in mind (property price and mortgage amount needed) and the see if the increased borrowing is still affordable and if any lenders will agree the amount you are looking for.

If you had a 100% mortgage 2 years ago, you may well find you are in negative equity as well on your current property.

Also do you get any extra income from your partner, or in the form of tax credits/benefits?

hoggums

Given that you are almost certainly in negative equity (have you considered this? Backing onto a river does NOT protect you from house price falls - if anything it exposes you as a flood risk) if you want to sell you will have to pay the difference between the mortgage and the sale price. I estimate that to be approx £14000 shortfall ignoring costs assuming your house has fallen by the national average of 16% and you find a buyer at that price.

Then you will need at least a 10% deposit for the purchase of your new home. So that's another £13,000

There is no mention of savings in your post - do you have £27,000 saved up?

If not then you can't move.

Wickedkitten

Aye, you will definitely need at least a 10% deposit now and seeing as how you have a 100% mortgage, I would certainly bet you are in negative equity and are only going to get deeper in.

We had a 2 bed terrace about less than 10 minute walk to the sea that we bought back in may of 2006 for 83k, got offered 96k for it when we relocated in Dec 07, and the relocation company sent us a letter through Saturday saying they accepted an offer for 63k on it after the house being on the market for over a year.

You might want to see about actually getting it valued before you worry about mortgages.