Mortgage Advice Please?

Rainbird

I would like some advice on what to do with our mortgage arrangements.

We, like many others, foolishly took the advice of a broker and got a Northern Rock Together mortgage. We have spent the last few years overpaying to lower the unsecured portion of the mortgage in the hope to remortgage.

- The outstanding mortgage is £108,000

- The outstanding loan is £5,500 (down from £25k this time last year!). We're hoping to clear this by the end of May/beginning of June.

- According to the Nationwide house price calculator, our house is now worth approx. £122,500.

- Our current combined earnings are £60,000.

- We have no other debt, credit cards, or loans.

We would ideally like a mortgage with some flexibility to overpay, and the reassurance of a reasonable fixed rate (our current svr is 4.79%).

Also, would anyone know what are options are for moving? We would dearly like to move but with the market as it is, this isn't an option unless we radically drop the house price. Are there mortgages available that would allow us to let our house out for a period of time, or would a buy to let mortgage be more appropriate? Is it even financially viable to move away from our current home and let somewhere else?

Thanks for any help or advice you can offer.

Meeper

Meep!

If you sell your place for £122,500 and leave the unsecured loan in situ, you would have £14,500 equity to play with for deposit on a new property.

Taking into account the costs of buying and selling you would have around £10,000 as a deposit on a new place which would mean you could, at maximum, purchase a property for £100,000 as you will need a minimum of 10% deposit.

At the moment, you are doing the right thing. Pay down your debts as much as possible and save as much as you can. Might be worth paying money off the secured element perhaps as this would give you additional equity on sale whereas overpaying the unsecured element is only reducing your debts and won't get you more money at the point of selling your existing place.

Rainbird

Sorry for the massively belated reply! Have been meaning to reply but not had anything really to update until now...

We took your advice Meeps. We were pretty much expecting that response.

The loan is now a dim and distant memory and the capital has been paid down to 104k on the mortgage. We are currently in the process of transferring the mortgage to Britannia for a fixed term mortgage (5 years) at 3.99% so we should be moving away from Nram in the next couple of weeks. Cannot wait to be away from Nram. The communication from Nram lately has been horrendous.

Houses around here have been selling quite well lately but we've decided to stay put and keep chipping away at the mortgage and putting a bit aside in savings until we're sure it is a good time for us to move.