Help: Can I move soon?!

Sam84

Hi all,

I am after a bit of advice and opinions on how myself and my other half could try and move to a larger home and hopefully start a family...Sorry if it’s a long thread, any questions please ask!

Bit of background:
We moved into our flat in August 2007 (at the height of the market). We bought the flat for £142,000 and borrowed an additional £30,000, of which £7,100 was our ‘mortgage deposit’. You’ve guessed it...we chose the exceptional Northern Rock together mortgage!

Fast forward to today:
We have paid all of our loan and CC debts off. We have also managed to save £20,000, which we hope to use for a deposit. Our flat is now worth around £134,000 (next door sold for this).

So to summarise:
Our flat is worth £134,000
Our mortgage is £137,000
We have the ‘together’ loan part of our NR mortgage, which is £29,000

I earn: £42,000
Wife earns: £32,000

We have £20,000 saved

We would like to buy a house for between £250 - £300k (we are in the South East and would like a nice 3/4 bed house) if possible and are open to ‘New buy’ and ‘Help to buy’ schemes.

I will eventually look for an IFA, but in the meantime thought I would get some opinions.

What are our options and how should we best proceed?

Thanks for any help

Sam

Suarez

So...

Flat is £134,000
Savings £20,000

Less

Mortgage £137,000
NR Loan £29,000

Balance -£12,000

You are £42,000 short for a 10% deposit....

kingstreet

The only option appears to be keeping the unsecured loan and paying the higher rate. 12.79%, if you remain within affordability by doing so.

Sam84

Thanks for replies.

That's what we are thinking.

Keep £29k loan and go on the ridiculous APR! Hoping that a chunk will be paid off in the future (Which would be fair...as per NR loans under £25k)

Then pay the £2k negative equity and use £18k for deposit on new house.

What about the 'New Buy' / Help to Buy' schemes?

How can I calculate affordability? (I realise this will be a guess and dependant on mortgage provider)

CHeers

mrginge

Sam84 wrote: »

Then pay the £2k negative equity and use £18k for deposit on new house.

CHeers

Where's the minimum 10k you need for stamp duty, fees ...etc

Sam84

I mean use the £18k (plus any more that we save) for deposit and stamp duty, fees etc.

If we find a 250k house and utilise one of the government help to buy / new buy schemes we wold only need to put down 12.5k as a deposit?

What I really want to know if possible is my likelihood of getting on one of the government schems (affordability etc.)

Thanks

ViolaLass

https://www.helptobuy.net/help-to-buy-options/help-to-buy-eligibility-criteria

Behold the power of Google.

Thrugelmir

Pay down the loan/mortgage rather having such a large balance in cash savings. It will save you money.

ch3101

If I were you I'd be looking to get a reasonably sizeable deposit ready before moving.

You should (jointly) be bringing home >4.5k a month, surely you can save/overpay mortgage by well over a grand a month? Maybe even 2 grand?

I'd do that for at least a year, get some equity going in your house so that you may even have a 15% deposit, then start looking while continuing to save.

Obviously it's very nfortunate when you bought the flat but I guess just take it on the chin

DannyboyMidlands

I would respectfully suggest that you need to learn the lesson from your NR experience.

Simply save some money and move when you can afford it rather than looking for (another) expensive short cut.

I don't see why you can't be tucking away at least £1500pcm towards that end. Where is all your money going?

Sam84

Thanks for comments so far.

What I really would like to know is affordability criteria looked at for the new 'help to buy' scheme coming in in January (which I believe has no restrictions on salary etc.) or the 'new buy' scheme for a new build.

I will take on board all comments and definitely use some of our wages to overpay. Should we overpay the mortgage part of the together product or the 'loan' part in you opinion?

Cheers