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**Help** with Equity Loan & re-mortgage options

edited 30 November -1 at 1:00AM in Mortgages & Endowments
mattsekamattseka Forumite
5 Posts
edited 30 November -1 at 1:00AM in Mortgages & Endowments
Hi,

I hope someone can help with my re-mortgage options. We are to re-mortgage in May 2015 and have two options. A housing association own a 20% share in our property which we purchased at £180,000. We have an income right now that will allow us to extend borrowing a further and pay of the housing association. Our house is now worth £280,000 so will need to borrow a further £57,000 putting the mortgage at £700 per month other a further 25 years. However, in a years’ time my wife will be going down to three days a week losing a chunk of our income. So the other option is to keep the equity loan rolling and move down to £500 per month over 19 years which is a really comfortable amount and will make things easier in the following years. We might not be in this position again though with super low rates and house prices rising over the next 5-10 years so it makes sense that we pay off the equity loan by extending the mortgage and tighten our belts a little more to cover the extra £200 per month. Or does it? Maybe we should keep the equity loan and make things easier for ourselves, or will this make it impossible in the future to ever buy them out? As you can see I’m going round in circles and would love to hear anyone’s thoughts or opinions. Maybe you’ve been in a similar situation yourself?

Thanks for your time,
Matt C
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