100% mortgage advice

RockNRollNerd

Hello,

I hope someone can shed some light on our situation for me please as I'm a bit clueless!


We bought our house as first time buyers in 2008 on a 100% mortgage. With the market the way it is now, the house will have obviously have decreased in value, possibly by about 10k, maybe more (we bought for £106,500), although we have had the bathroom refitted and some other cosmetic work. I know the chances of switching lenders or anything like that at the moment is slim to none due the high LV needed, and us now being in negative equity.

What I'd like to know is, what would happen if we needed/wanted to sell and move soon? I don't really understand what happens to the current mortgage and getting a new one etc.

I know it's highly unlikely we're going to be able to move until the market picks up again (anyone know how long that's likely to be?! lol).

Thanks.

Thrugelmir

In order to move you'll need to settle your existing mortgage balance.

So if the mortgage is £100k and the property sale realises £90k you'll need to fund the £10k out of savings.

Then you'll also need to find the deposit on the new property plus the money for all the other expenses.

So don't panic. If your mortgage is already on a repayment basis you are slowly reducing the amount you owe. So to help matters along its worth overpaying every month. Even by a small amount if money is tight. Review your expenditure to see what waste you could cut out.

If on an interest only mortgage switch to a repayment basis (even if it means extending the mortgage term).