Not sure how mixed mortgage works..?

angjaw

I have 3 years left on my £25000 mortgage. Endowment is currently valued at £12500 - target was £25,000 so there will be shortfall.

I switched £5000 to repayment a while back so endowment target is now £20,000.

I need to re-roof, approx £7000, and some windows replacing. I was considering a further advance over 15 years but can't afford any more than I already pay.

How would this work? Would I still pay off what I receive from the endowment in 3 years time or will the whole mortgage ie £20,000+amount left on the £5000 repayment, be added to the further advance and leave me with a bigger amount to pay every month?

Is there a better/cheaper way of financing much needed repairs to my house? I'm not entitled to any grants.

kingstreet

Unless your current mortgage is on a particularly good rate, I'd consider remortgaging to a new lender over the fifteen years. Take it on part endowment, part repayment and pay off the first part when the endowment matures.

You'll have £20k on endowment and £12k on repayment. Using a rate of 3%, you'll be paying £133 per month, plus the endowment premium. After three years, you pay off the £20k and can then use the interest and endowment premium saving to accelerate your payments to the capital & interest part, reducing the term in the process.

angjaw

Thanks for the prompt reply.

I have a 50/50 co-ownership mortgage and very few lenders will consider these. Remortgaging is not an option as I'm on a limited budget and also have to pay rent - which is twice as much as the mortgage! With hindsight I would never have opted for co-onership

The endowment will not pay off the £20000, latest projection was only £12500. How would my lender factor this in?

I'm on the SVR since my tracker finished about 12 months ago.

kingstreet

Regardless of the other stuff, you need to do something about the potential shortfall. Switch more of the mortgage onto repayment, so the endowment pays off all the interest-only element when it matures.

I suggest you talk to a broker about remortgage of a shared ownership property.

If not, all I can suggest is talking to your current lender about the mortgage and the HA which will discuss the improvements with you.

angjaw

I will convert the shortfall to repayment to be repaid over a longer time period.

Unfortunately, I have zero savings and am unable to pay for a broker's advice.

I approached my local council about help with the roof. Their verdict was as there were no visible black spores on the damp walls and ceiling, and I have central heating, it is not a health hazard and meets the decent homes standard

I will approach the HA, the co-owner, to see if they can help.
Thank you