New Mortgage - Need Advice!

kayiss

Hi Everyone

This is the first time that I have posted on the site, so please be gentle with me!

I am in the process of splitting up with my long term partner and need to take out a mortgage in my name for the first time. However, due to adverse credit problems this is proving daunting.

A quick outline is:

Despite being in serious debt himself my ex is giving me a lump sum to repay my debts and buy a house.

I have £40k of debt in a DMP via the CCCS. They are in the process of negotiating with my creditors to clear this debt - so within the next month these debts will be paid and satisfied.

After paying these debts I will be left with £185K which I want to put down as a deposit on a house. The house I have found is £285k so I need a £100k mortgage. My broker has come back to me with a 3 year fixed rate deal at 5.19% - this is an interest only option and will cost £432 a month, which I can afford.

He says that this is a very competitive mortgage for someone in my position, however, I have never had an interest only mortgage before and am a unsure as to how to proceed.

Does anyone have any advise for me? What sort of questions should I be asking?



K

rjm2k1

Your partner is in serious debt and he's giving you a lump sum of 225k? Am I missing something here?

Why the need for a 285k house, couldn't you buy something smaller for cash and get back on track with little or no debts? Do you need a big house for kids? 5.19% doesn't sound too bad to me, but surely you could get the same mortgage on a repayment basis, or make overpayments on the IO to repay the capital over time (subject to the mortgage permitting it and any limits)? The advantage of repaying on the IO is that you are not making a commitment to pay the capital off over time, so you can throttle back to the minimum IO payment if needs be. I guess the most important question to ask your broker is can you get a repayment, or overpay on the IO and if so, subject to what limits and penalties.

kayiss

Thanks for your response.

My ex has a new wealthy girlfriend - or should I say mistress. I assume that this is where the money is coming from so you could say that she is purchasing him from me!!!!

Hopefully I'll be getting the better deal!

Have looked at buying a smaller house and being mortgage free, but my father is seriously ill and it looks like I might need to put a roof over my mothers head at some time in the near future. I thought it would be better to buy a house that could accommodate all my needs over the next 5-6 years rather than buying a smaller one and then having to move on.