What should we do?

Bignosher13

Hi everyone, I follow areas of the forum relating to the Northern Rock Together Mortgage and hopefully am posting this in the correct place?

We are desparate to move if possible due to issues on our estate, so any advice favouring that would be greatly appreciated.

Current Situation:

Northern Rock Together Mortgage (+ unsecured loan)
Mortgage £83,000 (4.78% standard variable)
Loan £26,000 (4.78% standard variable)
remaining term 23 yrs (we are both in our early 50's so there is very little prospect of ever owning the house, we intend to rent in future)
Redemption £110,265 (inc £250 discharge fee)
By redeeming the ‘Mortgage only’ the interest on the loan increases by 8% (approx.)

Priority Debt: Tax Credit repayment £4,475
Unsecure Debts £9,200 (along with the priority debt these are on a manageable payment plan, currently the unsecure will be clear in 3.5 years)

House value approx. 90k giving approx £6k equity

We are soon to receive around 10k inhertance.

How would this inheritance and potential equity be best used in our situation, with a view to moving ASAP?

Apologies for the length of this post!

Bignosher13

Anybody please? We've made so many poor decisions previously and welcome any input to use a lifeline correctly

Tixy

What are the APRs you are paying on the current unsecured debts?

It really depends on your monthly affordability and how rent would compare to the mortgage etc and how the NR would restructure the unsecured debt if you sold the house and paid around £13k off the £26k (assuming around £3k selling fees & moving fees etc)

I guess you'd also then need to consider if you are likely to be able to refinance the remainder of the NR unsecured loan with another lender at a lower APR than 12.78%.

I'd try to work out a theoretical income & expenditure if you sell up and rent somewhere and continue to pay the tax credit debt and unsecured debts and the remaining say £13k NR debt.
And consider if you are likely to be able to manage to afford all the debts on your current incomes.