my story so far, thoughts please

crowe1

Hello all this is my first post and a sad one at that but let me no what you think.

Age: 27
Inome: £24000 (plus me fiddle work as a bonus)
Job: Joiner
Credit History: Not good

I bought my first home two years ago (22nd june 07) at a price of £83000. ive never been good with money so went to a broker and the only deal out there with a 100% 30yr mortgage was ge money with a rate of 7.94% fixed for two years. to keep the costs down i went with a IO im paying £566 pm. i really wanted to own my own home so decided to go for it i paid the broker £500 the soliciters £700 and the keys were mine. my thoughts at the time were keep paying the mortgage, pay off all debts and at the end of the 2yrs my house will be worth more and my credit report will be better thus getting a better deal. coming to the end of my two yrs my mortgage is at 85500, i was told recently fees were added. i dont think my house will have fallen in value as it was a diy nightmare. its a two bed end of terrace in a nice area. ive had a full new roof put on new front door DG, full new bathroom, brand new heating system, yard been put nice loft access and floored, bedrooms all been updated as has living room just the kitchen not been touched. my credit report although still not checked probably still not that great. i think im going to pay £100 to change to a repayment on a svr at ge moneys 3.69% above base rate for a little bit,
Is this my only option?
7% (10.69%) IR is the most i can afford, how far away are these rates?
With no new loans and just a couple of hundred quid debt left is it worth trying someone new maybe if my lv thing was 90%

unite79

Yes staying is your only option, but you should be able to make inroads into the capital be overpaying - as to how far reasonable rate increases are, I would guess (and it is a guess) - we are probably going to remain low for 12-16 months, then we will see steady rises - But at that point you have to hope more flexible products come out!

Another option would be to sell!

Rockporkchop

Get rid of your couple of hundred quid debt as soon as possible for a start to try and help your credit status.

I would change to a repayment SVR as you were going to do and then just overpay like mad as much as possible while the rates are low until you get the amount down a bit. Are you living on your own? As you say the house is all done up now and in a nice area you can earn £4250 tax free from renting your spare room out. If you knocked that off the mortgage along with paying the maximum you can yourself, you could get down to 90% LTV fairly quickly and have a much wider choice of mortgages.

crowe1

so i might be able to stay IO and overpay this will reduce the mortgage? i didnt no i could do that. has any one any advice on what mortage companys i should look for? live on my own but dont fancy having a lodger.
im just scared the IR will shoot up after june 22nd (end of my fixed term)
the remainder debt will be paid off next payday, this friday coming woo hoo

Rockporkchop

Have you had your house valued yet? If you have done so much work, it might be worth more than you expect even at this rough time. If you check the value then you can get an idea of the LTV you need. Maybe check on charcol.co.uk to see if there are any mortgages available for you, I don't necessarily mean go through them but at least get an idea of what is available. I have never gone for IO so I am not sure whether overpayments would be allowed but if they are allowed then the overpayment would come off the capital and reduce the debt. There is a good overpayment calculator at the top of the mortgage free wannabe section so you can see the difference it would make.