Fixed Rate due to end June 2010 & no idea what happens next

fluffymovie

Hello

I apologise if this has been asked before.

My husband and I bought our first home together in 2004 and got an Abbey 5 year fixed rate which is due to end in June of next year.

Hubby came to our relationship with no money and I had an inheritance which meant that I put down the deposit of £100,000. We did a deed of trust meaning that should things end between us, I would get 70% of the proceeds of the sale and he would get 30%.

We are now married and happy and I am looking ahead at what happens in 2010 but as this is my first mortgage, I am a bit lost.

I have read that come the end of our fixed rate, we will move onto Abbey's standard rate which is lower than our present fixed rate so this should mean that our monthly payments should go down.

However, I allowed Hubby to take out a secured loan for £20k against the property which he pays back. How would this affect any future mortgage application?

I assume that it would effectively mean that our capital in the home has gone from £100k to £80k? As our property was purchased for £220,000, would this affect our getting a new mortgage?

If we look to move our mortgage, would we be able to borrow more to clear the loan and add it into the mortgage?

Sorry if I don't seem clear? I am in a bit of a muddle which annoys me as I am quite clued up on all other things financial!

_Andy_

Basically you have four options

1) Stay with current lender
2) Change mortgage lenders and retain the secured loan (will require permission from the secured loan provider by what's called a deed of postponement/DOP)
3) Stay with current lender but increase borrowing to consolidate the secured loan
4) Change mortgage lender and increase borrowing to consolidate the secured loan

I'd suggest speaking to a whole of market broker who can work out what would be best.