Mortgage Dilemma - advice needed please

michaels1

I separated from my husband and my sister kindly agreed to come in with me on a house in order to get me on the property ladder as I was told that I couldn't get one on my own. We bought in August 2008 for £210,000 and I put the entire deposit of £40,000 down so we have a £180,000 mortgage and we split that and the bills 50/50. My sister said at the outset that she'd only stay for 2 years, at which point (Aug 2010) she'll move out. I haven't had the house valued again but I expect to get what I paid for it. My problem is that our 2 year fixed rate ends with Chelsea Building society which is 6.49% and their SVR is about 5.4% I think. As my sister will have to come off the mortgage I'm worried that even if I get in a lodger I won't be able to get another mortgage on my income alone (26k), especially as i'm borrowing circa 82% of the property. I'm worried that i'll have to sell up and won't get another mortgage now and i'll end up worse off. My sister is also expecting to get 50% of any profit back on the house even though I put down the deposit. Does anyone know what the best course of action would be for me to take. I have a 3 bedroom house and could rent at least one of the rooms so do they take that into account? Would they be more likely to give me a mortgage if I bought a 1 bed flat given my good payment history? Any help would be appreciated. Thanks

dimbo61

Need to talk to your sister about this !
Is she happy to stay in the property and pay half the mortgage and bills?
If not then consider putting property in the market in april/may in order to sell and buy a smaller place of your own.
She is entittled to 50% of any profit after you have taken out your £40,000 deposit
Did you draw up a legal agreement before you bought the property.
Where is she going to live if you sell the house ?

michaels1

Thanks. My sister has her marital home to go back to (using my house as 2nd home as nearer to her work), so not a problem there. She won't stay beyond the 2 years as for obvious reasons it's costing them financially. I thought I should be able to get a mortgage on my £26k salary with at least £30k deposit but the estate agent previously told me I couldn't and I know I need to speak to an adviser soon. I have a good credit rating too and £20k savings. Sorry for sounding stupid, but i'm not sure how this works. If I was to find a cheaper property that I could get a mortgage on can I move now? (my current fixed rate ends in September) - I thought I would have to wait until it ends to avoid the £5k redemption charge?

VIGILANT22

You have to check if your mortgage is portable....approx borrowing would be
4x 26k