Advice- Mortgage worries

Christine77_2

Hi,
Wondered if anyone knows if my wife and I will be in trouble next year, and whether it may be best to try and sell now and see how it goes.

We have a mortgage or 150k on a property. We are stuck in a Libor Tracker for another 12 months. Now, although we have no trouble meeting mortgage payments even though our wages have gone down a little, with the talk of 3x lending etc, according to this we would only get approx 110k mortgage, next year, I would guess we had 146k to pay. This would leave us with around 36k shortfall. We would not be able to save 36k in one year, especially with our drop in wages.

I guess the house is now worth 150-180k, not 100% sure as we never bought to make money etc, just to make a nice home for ourselves.

Looking at these figures, and what I have seen on this forum (guess we're one of the ones being gunned!) We could be in trouble come time to renew mortgage?

Although we love our home, would we be best to desert now and move in with relatives/rent?

Thank You

JayZed

I honestly wouldn't worry about the 3x salary multiple limit. It's only speculation at the moment, and may never happen. Even if it were to happen, I suspect it would apply only to new borrowing, not existing borrowers looking to remortgage.

Your bigger problem might be your LTV when you come to remortgage. If your house is only worth 150-180K now, there's a risk that you'll be in negative equity by the time your current deal ends. If that's the case you almost certainly won't be able to get a new deal, which means you'll go onto your existing lender's standard variable rate.

Depending on who your lender is this may not be a bad thing initially, but it will make you vulnerable to future interest rate rises.

beecher

I think it is best not to panic regarding the 3x salary as nothing is set in stone at the moment.

However, if your property is worth £150k now you won't be able to get a deal elsewhere due to your LTV. That's the bigger issue really I would say.

Christine77_2

Thanks,

Ok, so i'm worrying about the wrong thing then :rotfl:

I could get a valuation done to check, but obviously, we do not know what will happen with house prices in 14 months when the mortgage term i'm on now is up!.

Regarding LTV then, if say we would be even worse in 14 months, would it be best to get rid while we have a little equity in the house (iff possible to sell of course)
....not a route either of us want to go, but needs must and all that.

Thanks

Trying_to_be_good

Your mortgage won't just stop when your tracker ends, it ends when the final term ends - normally about 25 years from when it started.

Check your paperwork, see what rate you'll revert to, and for how long. That's the monthly payment you'll need to be making when the tracker ends. Only if you can't meet that do you need to worry.