HELP! Advice needed on house situation

beanie414

Hi folks looking to see what peoples opinions are on my situation.

I currently have a house worth about £150,000 current mortgage left on it is £80,000,the monthly payments are £600 and the interest rate on it is 1.65% that's due to fixed rate term ending and going to base rate tracker. I have been doing overpayments of about £600 every month for the last year.

I was thinking about moving house to a slightly dearer area and I might have to get another £50-60,000 mortgage on top of what we make from selling.

It will take about a year to save up an estimated £10,000 for moving costs. I was wondering if we should carry on overpaying current mortgage and see what the market is like in a year or so or just overpay the remaining mortgage completely or move now whilst the rates and house prices are kinda low?

I hope someone could offer some advice.

Fire_Fox

You don't need to save all that money up, you would need a modest amount for paying out for surveys and suchlike, but estate agent and solicitor can be paid out of the proceeds of the sale. Assuming you have three months mortgage payments set aside in case of illness injury or redundancy, overpay your mortgage so you cannot be tempted to spend the money and spend less on interest. What is the purpose in moving to a more expensive house/ area? You don't give any reason why this is urgent/ compelling.

beanie414

Thanks for replying Fire Fox. Sorry for the delay as I was working shifts.

We want to move as we need more space as we have dogs and live in a terraced house with a little garden and we have out grown the place. We live in Dagenham in Essex which is the cheapest place as a London borough but we want to move somewhere "nicer".

I was just wondering if it would be the best idea to move now the interest rates are low or to save and overpay and move later?

beanie414

Please, I would really like some advice.:)

Fire_Fox

IMO the first thing to do is ensure your place doesn't look like you have outgrown it and doesn't smell like it's full of dogs, the garden isn't just a doggie playground it's a bijoux courtyard for evening drinks or whatever.

I don't see that anyone can really give the best course of action other than that, it depends where you are in the country (some prices are rising, some static or falling), your own finances, future plans (do you want babies? If so could you afford larger house and lower income?).

Maybe get your house ship shape (decluttered, spring cleaned, neutral decor, finish niggly DIY tasks, garden sorted) and on the market, then hold out for the right price since you are not in a hurry. Option 2 is to go out and purchase a ton of dual purpose furniture - wall to wall/ floor to ceiling storage, wall bed, sofa bed, gateleg dining table, folding chairs. Amazing how much more space you can create.

dimbo61

What rate will your mortgage be when you go onto the base rate tracker ?
Now if its less than 3% then fill a cash ISA over the next couple of months with your £600 overpayments each month.
Moving lenders can be expensive with Legals, surveys, fees etc so having £6000-£10000 in savings helps pay for these things

RevolvingDoor

dimbo61 wrote: »

Now if its less than 3% then fill a cash ISA over the next couple of months with your £600 overpayments each month.
Moving lenders can be expensive with Legals, surveys, fees etc so having £6000-£10000 in savings helps pay for these things

We are thinking of doing this in our situation as the ISA rates are higher than our mortgage rate so we are going to stop overpaying and put the cash aside.

We thought we might be better off moving to a more expensive house when we have some savings and start overpaying on the new place.