COnfused mortgage help!

Jacka87

Trying to figure out what to do with my mortgage so will give you the background info first:

I am a graduate with a pretty safe job started in January, I have had a flat for around a yr now. I jsy graduated when I found my flat and had no job so could not get a mortgage. I had the deposit and my parents had equity in there home. They lent me the mortgage value (effectivly I have an 88% ltv mortgage with my parents). I repay the interest on this money only to them which is then paid directly into the bank covering the mortage. My plan was to remortgage to an repayment type and give the funds back to my parents that I borrowed.

Originally I was paying around £600 pcm interest only but due to the credit crunch it is now down to £160pcm. As a result I am saving £417 pcm into an ISA. Once it reaches its limit I will withdraw and pay that amount of the mortgage. Effectivly paying £577 pcm to mortgage @ present.

I am considering a 10yr fix repayment mortgage which would result in payments of about £100pcm extra. Anybody think this is a good idea, any alternative suggestions???

Jacka87

PS Sorry for long thread post

beecher

Is the mortgage in your parents' name at the moment? I don't know how it works if you're going to be mortgaging in your name, so hopefully someone else will be about to help you with that.

What you do have to work out is what your LTV is now. The value will have gone down over the last year so your LTV may be over 90%.

Jacka87

The flat is in my name and there is a security wrote up against my parents. The money they lent me however is added to there mortgage, thus why I pay the interest on it. So re-mortgageing the flat is not an issue.

In terms of ltv, the flat was a repossesion and therefore I got it at a good price at the time and therefore I dont think its actually worth any less at the momment, another flat in the building sold recently for what I paid for mine a year ago. I am also only going to remortgage at an ltv of 75% to keep the rates down, however this will prob mean I still have a small loan from my parents still of which I will continue to pay the interest, prob around a tenner a month at the moment and I will try pay off as quickly as possible with any extra cash.