should i change my mortgage

nicolacarr

hi im on a fixed rate mortgage with Northern Rock that ends may 2012. the rate is 6.49%. Mortgage is for 140,906.15. I have an unsecured loan running along side mortgage for 21,789.56.
If i come out of the mortgage i will have to pay early settlement fee of 5,600.00.
If i stay with Northern Rock they have informed us that we will have to find a new mortgage deal and take the loan with us.
So my question is should i stay with NR until 2012 or move my mortgage and pay the early fee.
I have also been on zoopla(think its spelt like that) to try and find out how much my house is worth and its only coming out at 170,000.00.
Sorry its so long really need advise as husbands wages have gone down and i cant find a job. thankyou in advance.

_Andy_

What is your husband's gross annual salary now?

nicolacarr

dont know exactly about 26000 from 33000

luckyfool

If you stay with Northern Rock you will not have to find a new deal and take the mortgage with you. You can sit tight on the Northern Rock Standard Variable Rate on both your main mortgage and also the unsecured loan element. This might not be ideal as it would be variable, and far from the best on the market, however it sounds like your best option may be to stick with that or sell the property.

_Andy_

On his current income you wouldn't be able to switch lenders anyway.

nicolacarr

in 2 years time wouldnt my house be worth more? husbands wages may go up at the end of year and hopefully i will have a job.

_Andy_

nicolacarr wrote: »

in 2 years time wouldnt my house be worth more?

Possibly, who knows?

husbands wages may go up at the end of year and hopefully i will have a job.

Still doesn't mean it would be a good idea to exit early for the sake of some short-term savings.

Thrugelmir

nicolacarr wrote: »

in 2 years time wouldnt my house be worth more?

In the current economic climate I wouldn't bank on debt being inflated away.

Supporting a debt level of £160k on a salary of £27k. Is extremely concerning. I assume that the debt is entirrely on an interest only basis.

Personally I would seriously consider selling the house and clearing your debts. Speak to the NR and explain your situation. See if they will agree to waiving the ERC if you move into rented accomadation.

NR (bad bank) are running down their mortgage book so they may help you considering your position.

Although starting from scratch may seem daunting. Life will be far less stressful.