Remortgage Advice required ????

holmsleigh_girl

Hi people - I am a newbie posting for the first time so bear with me !!!!

I have an equestrian property with 5 acres and 8 stables which is worth at last valuation about £400K - I have a mortgage of £200K which was leant when times were good and myself and ex husband had fabulous incomes !!

Back to reality !!!- myself and my new husband now do not earn enough to even borrow £200K from the bank building society so my father came on the mortgage and used his income to help me get a mortgage.

My fixed rate is now up in September and I have been paying interest only since 2008.

I have 2 problems.......

1) I would like to go onto repayment and try to reduce the amount i owe as i may as well be renting at the moment as have not reduced it for 3 years !! Repayment mortgage costs are looking at between £800 and £1000 which i really cannot afford !!

2) Also my dad is now 57 years old so i am worried that the bank/building society wont lend over a long term due to his age so payments will rocket even more !!

My dad is happy to stay on mortgage in any way shape or form to help so what is my best way forward ??

He owns his own property which is worth about £230K outright with no mortgage !!

Any ideas would be greatly appreciated from you folks !!

Have thought about moving to release equity but livery costs for horse will then be around £400 per month so what i would save in mortgage i would spend in livery and before anyone says "get rid of horse" not an option as i live and breathe and work for my horse !!

Sounds sad i know but everyone has to have a hobby if not why bother !!!

Thanks in advance

sterlingstash

Look at what rate your mortgage will be when the fixed rate ends. You may find that it is lower than the fixed rate you have been paying.

There is nothing magical about a repayment mortgage - it just means paying an extra amount over and above the interest which will ultimately pay off the capital at the end of the term. When the fixed period has ended, you will probably have no limit on how much you can repay. So why not make overpayments to the mortgage as if you were on a repayment mortgage? You have already worked out what the repayment mortgage amount should be. You don;t need to move mortgage to do this.

The only reasons get a new mortgage product might be to move to another fixed rate (which are at historic lows) for the certainty they offer, move to a better rate if your rate after the fix ends is high - or to release your dad from being named on the mortgage.

Why not either make as much of an overpayment as you can afford each month to the mortgage (or into a savings account if your mortgage reversion rate is very low eg 2.5% and you can get better rates on savings)

Thrugelmir

Start by overpaying whatever you can on the mortgage. At least start to bring the balance down.

Can you generate additional income from the facilities you have? i.e. 5 acres and 8 stables.

You need to be realistic. If you want to keep your horse. Then buy an affordable property. Something has to give.

holmsleigh_girl

Am looking at all options of generating income !! Liveries could generate anywhere from £25 upwards per horse per week so def an option although do not want to be caught out by local authorities for not being a business !!

As for something has to give i am looking for constructive criticism which you have provided and i thank you for that but i did say that giving my horse up is not an option !!

I know that may sound very "spoilt brat" but i have worked very hard to have horses all my life so am not quitting them without a fight

Really wanted some ideas to the mortgage

Thank you again both for posting - i really do appreciate it

Holmesleigh Girl

Thrugelmir

Hard to see options you have for the mortgage. If you are unable to afford the capital repayments then you will in effect remain renting the property. Without your father your are stumped in terms of borrowing this amount on an ongoing basis. Lenders will now require a mortgage to be on a repayment basis as well if you remortgage.

So unsure what answers you expect.

If interest rates were to rise say 2%. Then your monthly outgoings would rise by £333. So you do need to think very carefully and make some long term decisions.