Help mortgage has nearly gone up by 3 times!!

Kels1timmy

Please bear with me this might get complicated.

My parents brought me and my wife a house for 200,000 against their property worth 320,000 which as a four we pay together but only my parents are on the mortgage and technically own the property aswell. this is their total debt apart from minor credit cards and a small loan. We were paying £333 PCM interest only fixed rate for 2 years now it has gone up to £850 PCM this means I can't afford to pay off any balance.

I wondered as my parents technically own 2 properties worth 520000 in total with 200000 debt can they get a better rate.

The reason the mortgage hasn't been reduced thus far is because we renovated and purchased house for 150000 and spent 70000 bringing total to 220000 so main priority has been clearing high interest rate debt which has now almost gone.

Thanks in advance for any advice.:)

Thrugelmir

Who is your mortgage lender ?

opinions4u

What product /rate were you on?

What is the rate now?

Who is the lender?

Come on, dish out a bit of detail or you just leave people guessing.

Kels1timmy

Hi, it was a 15 year term with alliance and leicester and the overall cost for comparison 4.8%.

The breakdown exactly on letters is-
Repayment method-188,000 on interest only and 3,790 on repayment
Initial interest rate-1.99%
Product description-flexible 2year base rate tracker

Basically over the next 2 years from now me and my wife are in a very good financial situation and should be able to make a massive dent if we can get a good rate the longer the better.

Thanks in advance.

GMS

Do your parents have income(s)? What are their ages?

Who is noted as the owner(s) of the property you live in?

Could you not raise a mortgage against the property you live in?

Kels1timmy

Their income is about 45,000 combined they are both 50 and own both houses house 1 worth 320,000 with 200,000 against it and house 2 worth 200,000 nothing against it.
My wife and I 45,000 combined I am 25 and wife is 29
Yes we could raise a mortgage on the other property me and my wife have thought about taking half the mortgage off them if it would work out cheaper?

Is their anyway we could get a mortgage as a group all 4 of us to get a better rate?

GMS

Have you considered 2 mortgages? One for you and your wife on the property you live in and another on your parents house for them.

You could potentially buy the property from your parents at below market value with them gifitng the equity as a deposit. This may enable you to take a decent rate.

Similarly for your parents on their property. A smaller mortgage which would be sufficient to cover the deposit on your place.

Current mortgage repaid and 2 mortgages running at better rates over 2 properties.

Kels1timmy

Only just started to think about it really, how would it work?

GMS

A broker may be useful fr you for this one.

Essentially your parents sell the property to you for an agreed amount below the value. The equity can be gifted meaning no deposit needed from you.

This will most likely leave a shortfall on what is currently owed. Your parents would raise a mortgage for the difference on their own property.

The proceeds from the sale and the mortgage on your parents place could then be used to repay the mortgage in place now which has increased.

Obviously this assumes all criteria can be met etc.

Also ensure the lender for your side of the transaction i.e that they will accept a 'sale at undervalue' with the deposit being a gift of equity.