5 yr fixed term on 14 yr mortgage, ended, what next?

costaerer

Hi,

3 years a go my parents 'bought' our flat. They paid a £20000 deposit, which i think was about 15% and we got a 5 yr fixed term interest only. Currently paying £550 pm.

As me and DH are only 22, both students, though we do support ourselves and pay the mortgage.

my dad was 52 when the mortgage was taken out, (3 yrs ago) but because of his age hes only got a 14 yr mortgage on the property.
we still have 2 yrs left to go.
basically what i want to know is, what happens at the end of the 5 yr term- can we start paying the capital and interest what it is now? , i guess the amount will go up? we cant get our own mortgage for 5 yrs because of my credit history and were both in uni so will need to have a couple yrs work history and guaranteed income behind us also even if we have a decent deposit!

will RBS give my father a mortgage for longer than 9 yrs? ie. till hes over 65? ive just worked out on the mortgage calculator if we do the same amount over 9 yrs the capital and interest will be £1300pm!

just a bit concerned well have to sell our flat! if it makes a diff my parents own their house outright, and another property and have decent savings and a decent salary.

anybody got any great suggestions?

dimbo61

well done on clearing your other debts
build up savings so you can get a mortgage yourself at the end of the fix and buy the property off mum and dad so move somwhere else and buy a property that you want.

costaerer

the point im saying is, even if we have a deposit, which could be as much as £50,000 by then (some from savings, some from insurance pay out and some from parents) my credit history is too bad to get our own mortgage in 2 yrs, id say the earliest we could get a mortgage is 5 years time from now. In two years ill still be in uni and my husband will only have been working for maximum a year. so its almost impossible to do that buy this flat from them in 2 yrs time.

costaerer

dimbo61 wrote: »

well done on clearing your other debts
build up savings so you can get a mortgage yourself at the end of the fix and buy the property off mum and dad so move somwhere else and buy a property that you want.

you've told me to build up savings to get a mortgage myself in two yrs and buy the flat off my parents, and to move somewhere else? makes not alot of sense!

TrickyDicky101

Is your current mortgage on a repayments or interest-only basis? If the latter do your or your parents have any form of repayment vehicle in place (eg ISAs/other savings)? What was the original mortgage balance and what was the 5yr fixed rate you agreed to? The mortgage balance can't be that high (unless interest-only) if you only had a 14yr term originally. Couldn't your parents continue with the mortgage in their name with you paying the monthly payments? I take it you have no intention of moving presently (or for the next couple of years)?

gizmo111

You don't remortgage at the end of 5 years it will change to lenders SVR - what is the follow on rate?

costaerer

TrickyDicky101 wrote: »

Is your current mortgage on a repayments or interest-only basis? If the latter do your or your parents have any form of repayment vehicle in place (eg ISAs/other savings)? What was the original mortgage balance and what was the 5yr fixed rate you agreed to? The mortgage balance can't be that high (unless interest-only) if you only had a 14yr term originally. Couldn't your parents continue with the mortgage in their name with you paying the monthly payments? I take it you have no intention of moving presently (or for the next couple of years)?

currently at £500 pm interest only. if we paid capital and interest it would be £850, but its in a fixed term of 5 yrs so we can only pay the interest.

my parents have isa and savings, and own two other properties outright.

the original balance (i think was 123k), which it still is as weve paid 3yrs interest only.

my question really was, can we keep the mortgage in their name?

costaerer

gizmo111 wrote: »

You don't remortgage at the end of 5 years it will change to lenders SVR - what is the follow on rate?

i guess its all in the paperwork, my parents have it. just asked here because started to panic a bit!

gizmo111

I'm a bit concerned that you have no idea what your financial arrangements are.

Do you pay rent?

getmore4less

costaerer wrote: »

i guess its all in the paperwork, my parents have it. just asked here because started to panic a bit!

Why are you paniking it is their house and mortgage not yours.

dimbo61

Sorry what I was trying to say was if you build up savings over the next few years then when the fix ends you have options !
You can buy the property off your parents or buy somewhere else as you have a deposit