Mortgage concerns-what's best?

Tinkabell25

Hi Guys,
I was wondering if you could help me find the best thing to do. Apologies if this is the wrong place to post about this too.
My OH and i have been in our current house almost 3 years and we took out a 5 yr fixed deal on our mortgage. We want to move house at the end of our current deal in 2 years, into a property that costs a few thousand more as we want to move areas. My question is, is it our best bet to use any extra funds we have in the next 2 years to overpay on our Mortgage, or save for a deposit and extra costs on a new property when the time comes? We were first time buyers so i haven't had to sell a property before and know it is expensive which is another concern i have. Generally (sorry for naivety!) i'm not sure how the moving process will work with a new mortgage etc, our wages haven't really changed as his went up but mine went down by the same amount.
Any advice anyone can give me? I would really appreciate it!
Thanks!
Tink x

jamesperrett

It would be helpful to know what your mortgage interest rate is although chances are, you are unlikely to be able to find a savings account that will pay you more interest than you are being charged for your mortgage so you would be better off overpaying the mortgage (assuming there are no penalties for overpayments).

Cheers

James.

getmore4less

Any other reasons why you are waiting to move

Was the mortgage portable?

Tinkabell25

Hi,
Thanks for your responses. The reasons we want to move is that at the moment we cannot afford it, i'm on a low wage looking for another job so we can save more and also we want to do the house up to sell for a good price, at the moment it's likely we'll be in negative equity if we sell it due to the house prices in the area. Also the area we want to move back to (home!) is more expensive to buy in. Since i haven't moved before i've been told that all the costs of actually moving are around £10k which is a big worry too. As far as i am aware my mortgage is not portable however my OH is loioking into this today. My current fixed rate is 5.88% with nationwide, ending in July 2012, we can overpay up to £400 per month (can't afford that much though!)
Thanks, Tink x

beecher2

Tinkabell25 wrote: »

Hi,
Thanks for your responses. The reasons we want to move is that at the moment we cannot afford it

And yet you want to move to a more expensive property?

As you're in negative equity, your priority has to be to save as much as possible in order to move. You need to be able to save enough to cover costs, your outstanding mortgage, and a 10% deposit (at least) for your new place.

Post a Statement of Affairs if you haven't already, and explore getting a lodger, or a second job?

Tinkabell25

Hi, Sorry i haven't explained myself very well there so will try again! The reason we want to move is because we want to go home to where we moved from, we are very unhappy where we live now and employment is better for me there-my partner's job is transferable to there too. It will cost more due to the area however in a couple of years we are more likely to be able to afford it as i am currently sorting myself out with a new job and plan to get a second one once i have done that. Due to the shifts i do at the moment its not possible to get a second job - the instability of my hours makes it impossible, they change weekly. My partner currently has 2 jobs and is saving a fair bit each month, We are due to pay off our last 'big bill' this month using his money he has saved, then we can save for moving costs to move or over pay whichever appears the best decision. From what i can see i think we need to do both, overpay slightly on the mortgage and save some money each month. This will be easier when i am earning a good wage. I will post a statement of affairs later on today and any feedback on that would be welcome.
Thanks
Tink