Complex situation- ideas please

Stirchley_Surfer

Hi all,

I'm looking for advice about re-mortgaging.

Back on 2006 I bought a flat on an equity share. I paid 75% and the developer paid 25% (the price was going to increase so I could pay that back- I was so niave ). Anyway in 2008 I had change of life and went back to uni... Just as the housing market really slowed down so couldn't sell the flat. (I was doing so well). Anyway went to the bank and they agreed a consent to let. I was going to uni so wanted to be sure of costs so fixed at 6.84 % (it just gets better!). The best bit is that my monthly payment is £963 and I get £620 from rent. I've been sucking this up for 2 and a bit years now but I'm starting to feel the strain as my savings ebb away.

So I'm looking for any ideas.

Current mortgage

• Halifax 3 year repayment fix due to end Sept 2010
• Rate 6.84
• Early repayment charge £1340
• 20 years and 9 months remaining

Thanks for your help!

GMS

Is the mortgage on Interest Only or Repayment?

If Repayment see if you can switch to Interest Only.

Stirchley_Surfer

Thanks GMS

I'm on repayment. I had considered going interest only but my fear is that because I bought near the peak of the market, the less capital I pay off the more potential there is for loss when I come to sell.

N

GMS

Potential for loss is something all homeowners take on.

Your problem to me looks to be the £300 plus shortfall each month. This will hurt you in the short term, any losses on value could be much longer term or even sort itself out if/when prices rise.

If you can swallow the £300 plus payment each month then it goes without saying that this is a much better option than interest only. If not then you may need to consider it.

What would you need to pay to clear the mortgage and shared equity? What is the property worth?

getmore4less

Stirchley_Surfer wrote: »

Thanks GMS

I'm on repayment. I had considered going interest only but my fear is that because I bought near the peak of the market, the less capital I pay off the more potential there is for loss when I come to sell.

N

makes little difference the cash is lost now or later its only the extra interest you have to consider.

I guess you mean ERC till sept 2011 not sept 2010.


whats the followon rate?

Stirchley_Surfer

Property was valued at 220 000 in 2008 but that was Halifax's own valuation.

It would cost about 180 000 to buy out mortgage and equity share.

ERC is from 2011 , follow on is Halifax SVR currently 3.99