how can i get out of a 100% mortgage

redroofer

hi, we have had a 100% mortgage for 4 or 5 years now, the plan was to have it for 2 years and then switch, but the recession kicked in a few months before the end of 2 years! we are now stuck and dont know how to get out of it.
we have no savings, and unless i win the lotto, we wont have any!
the house is still worth less than the purchase price (£195,000)
any advice would be very much appreciated.

GMS

Why do you need to 'get out' of it?

You signed up to the mortgage so need to stick to the terms and conditions. Relying on increasing prices was always a gamble.

redroofer

i wasnt relying on increasing prices, we dont want to sell the house.
i dont want to give the keys to the mortgage company in another 20 years!

i would much prefer to hand over the money each month and know that it is actually paying off the mortgage.

BoGoF

Is your mortgage interest only?

Gromitt

Your giving conflicting information.

In your first post you say you want to 'get out' of your mortgage. As in, you don't want it anymore.

Now your saying you don't want to sell the house.

So the only option left is to just keep paying the mortgage.

Barny1979

I presume it is interest only? Why go for interest only if you don't want to just hand over the keys after 20 years? Surely you'll have had to set up an endowment for interest only? Otherwise, switch to a repayment mortgage with your current provider.

BargainGalore

Stay put and just keep paying the mortgage assuming you can still meet payments. Lots of people end up in negative equity the only problem arises if you cant at some point meet those payments.

If it is a interest free mortgage you should have had some sort of endowment to meet the repayment of original loan.

Wutang_2

None of this makes any sense

redroofer

BoGoF wrote: »

Is your mortgage interest only?

yes it is
.............

redroofer

Barny1979 wrote: »

I presume it is interest only? Why go for interest only if you don't want to just hand over the keys after 20 years? Surely you'll have had to set up an endowment for interest only? Otherwise, switch to a repayment mortgage with your current provider.

it was a way to get on the property ladder, ie. 2years interest only then switch to a 'normal' mortgage.

sorry guys, very new to all this!

BoGoF

In that case your options are either

1) Set up a repayment vehicle, but that seems unlikely as you said you cannot afford to save any money
2) Switch to a repayment mortgage, which will increase your mortgage repayment - is this feasible?
3) Stay on interest only but overpay.

The bottom line is that unless you take steps to reduce the capital you will be giving the keys back in 20 years. Bear in mind there is only one way interest rates can go, could you afford to pay the mortgage if rates increased, say, 3%?