Mortgage payment query

spirit

Hi,

I spoke to the Halifax yesterday to ask if there was anything they could do to (temporarily) help me reduce my payments. I took out a 90k fixed rate 3 1/2 years ago - initially on a 2 year fixed, then signed up again for another 2 years in Feb 05. So i currently owe about £85k and the fixed rate doesn't end til Feb 06. As far as short term help, they said i could opt for a payment holiday but it would either add to the payments or the life of the loan. As I'm 49 I don't really want to extend the time but then I don't want the monthly rate to go up either.

so (sorry about the essay), another option could be to sell up and downsize. My house is worth £235 ish - my neighbour sold recently for 220k and hers didn't have the extension and conservatory that mine does. so my question is, if i sell it for 235/230ish and pay off the mortgage that leaves me with 150k - not taking into account selling fees. If i then found another house for say £175/190. what mortgage payments would I have to pay back each month? i should add that the fixed I'm on at the mo is 4.75% and I pay £562.00 each month - ouch!!

thank you

Chris

Joe_Bloggs

From what you say £85K at 4.75% gives £562 over 19 years 3 months. So even if you could maintain the 4.75% rate it would take until July 2025 to pay it off. If the payments are broken down, at present, you are paying £226 in principle and £336 in interest. It may make more sense just to pay the interest part rather than take a payment holiday. This way you don't make the repayment numbers worse but just extend the mortgage by one month for each interest only payment.

Were you to sell up and have £130K deposit left and buy for £190K then a mortgage for £60K over 15 years @4.75%would be. £466.70 per month,£389 if you borrowed £50K.

Can you take in a lodger to boost your income. Can you reduce your expenditure ? This site is all about moneysaving so visit all the forums and pick up what information and tips you can. It might help you to create a statement of affairs so you can see where your money is going for yourself.
J_B.

spirit

Hi JB.

Thanks for your advice number crunching isn't my best skill!

I suppose I'm really running around like a headless chicken at the moment and don't want to make a wrong and expensive decision. My DD started university last year and DS starts this. because of this my income has gone down through loss of child benefit, Child tax credit and their father's contributions. I suppose this has meant a loss of about £300 a month. DD comes home from uni fairly regularly and is home soon for the long summer break. so I can't let out her room and DS is still here. I'm just really fed up of working long hours (I have to work all day Saturday to make up my pay) just to keep a roof over our heads. I don't have a social life at all - it all goes on the bare bones of existence. Yet I really like my house and have done lots to it to improve and update it over the last 3 years. However, I also want a better quality of life.

I haven't got my SOA on me - it's at home, but will post it later. There really isn't anything else I can give up that I haven't already. In recent days, I have reached desperation point and even considered moving on to the next world as it were cos at least that way my kids would be better off as they get half the house and the mortgage would be paid.......sigh

Joe_Bloggs

There is no need to despair as you have two willing young adults who will benefit from work experience over the Summer months. If they don't use their tax allowance, this year, then they will lose it and may have nowhere to come backhome to. It might be best to put your SOA on the debt-free wannabe rather than here. There is a lot more penny pinching expertise there. There is a great deal of real life expertise in facing and dealing with similar situations on these boards.
J_B.

E@J'S_DAD

have you thought about taking in foreign students over periods when you have the empty rooms.Dont forget ,it is your house , remind the kids of this,and im sure they will understand.you should earn £100 a week and you can take students for just a couple of weeks at a time

spirit

Hmnn, good thinking Batman. I know my sister does that but then she lives in Oxford where there's no shortage. I'll look into it thanks

spirit

E&#64 wrote: »

have you thought about taking in foreign students over periods when you have the empty rooms.Dont forget ,it is your house , remind the kids of this,and im sure they will understand.you should earn £100 a week and you can take students for just a couple of weeks at a time

i've just sent a mail to the local school of English to ask them. it also says on there that they pay between £75 - 97 per week for self catering and 98 - 120 for full board.

bril idea - lets hope it comes off!

Ian_W

In recent days, I have reached desperation point and even considered moving on to the next world as it were cos at least that way my kids would be better off as they get half the house and the mortgage would be paid.......sigh

I REALLY, REALLY don't think your kids would consider themselves "better off" having a house but no mum - I'm sure they'd prefer a tent and you still around to see them grow into adulthood and start their own families. Money troubles might seem insurmountable but they seldom are ... people and family are what really matter.

Always remember that though things might feel bad, there are plenty worse off than you then start working to make your situation better. There are plenty of knowledgeable and helpful folks on these boards who will advise and support as best they can.

spirit

Me again!

I've pretty much decided to downsize - I've got an agent coming round tonight to value. can you give me a rough estimate of repayments on a mortgages of either £40, 30 or 20k please? I've also decided to move nearer work so I will save lots on petrol. I'm currently paying about £220 a month in petrol alone since the office is a 25 mile drive each way.

thanks all

Joe_Bloggs

I had no idea that petrol was such a significant cost in your budget. A relative of mine gave up a job, requiring a graduate and postgraduate degree. It made more sense to give up a 120 mile round trip each day, to become a child minder in her own home.
What you need to mention is the term of the mortgage. This often relates to when you retire and are on a pension though it need not. Permitted over-payments can reduce the term considerably.
£40K @ 4.75% over 15 years gives £311.13 £30K is £233.35 and £20K is £155.57
Source for calculations Here.
J_B.

spirit

Joe_Bloggs wrote:

I had no idea that petrol was such a significant cost in your budget. A relative of mine gave up a job, requiring a graduate and postgraduate degree. It made more sense to give up a 120 mile round trip each day, to become a child minder in her own home.


yes, it's shocking isn't it when you add it up. It equates to 2420.00 a year (taking off 1 month for holidays). I don't do much mileage at all other than work - other than the occasional visit to my daughter at uni.

As you've said in the beginning of my OP, the term left on the current mortgage is 19 years something. I had another look at my Halifax statement yesterday and it was £85k as of 1st Jan this year so as you rightly mentioned it is £562.52 for the next 19 odd years otherwise.

is it realistic to have a mortgage at 4.75% or are there cheaper deals out there? also, do I transfer my current mortgage - but just for the newer (lower) amount please?