Just discovered partners mortgage details

ACG

Your post is confusing, he cant afford to overpay, he has no way of paying it back at the end of the term.

What do you want the outcome of this post to be?

silvercar

If he is not on a bad interest only deal, then he may as well sit it out. In the long term his credit may improve and house prices should increase. At the end of the term (often 25 yrs) he could sell up and buy something smaller with the equity in the property at that time.

If money is tight there is little point in moving to a repayment mortgage and risk falling into arrears, better to put money aside and build some rainy day savings and if possible money to reduce the mortgage at a time in the future.

Don't think of this as getting nothing for his money, if he didn't have the property then he would be paying rent elsewhere.

Thrugelmir

amyanderson2 wrote: »

it seems as though he us throwing the money away.

In effect he is renting the property.

Would it possible to downsize, i.e. buy something smaller and more affordable. Lenders are very amenable to such proposals.

andyfromotley

1. How much is his property worth?
2. How much is the mortgage outstanding?
3. How much are the monthly repayments
4. How much is his take home pay?
5. Does he actually live in the property he owns? If not is it rented? How much does he get in rent?
6. What apr is the mortgage on and how long does it have left to run.

No one can give you any advice without knowing these basic things.

amyanderson2

From the top of my head

Property is worth about 100,000
He owes about 67,000
Monthly payment is 370 approx
He lives in the property so no rental income and I am not sure about the Apr

After searching online it looks about the same monthly payment if it was a repayment mortgage

Was just generally looking for some advice, I wrongly assumed with the house having some equity he would be able to remortgage no problem but apparently not.

Thanks for the advice so far

amyanderson2

His pay is also about 1000 a month if that helps

nidO

amyanderson2 wrote: »

He owes about 67,000
Monthly payment is 370 approx

That works out as roughly 6.6% interest.

If this is correct, he should be going and speaking to a broker to see if he can get a repayment mortgage at a lower interest rate - I would assume with a 70% LTV and with missed payments over 3 years old, this shouldn't be all that much trouble.

ViolaLass

Even if he can't get a better deal, he could save money in the long run by overpaying. He needs to up the payment to about £460 a month to pay it all off in 25 years, for example (assuming the rate doesn't change). £760 would pay it off in 10 years.

Thrugelmir

amyanderson2 wrote: »

Was just generally looking for some advice, I wrongly assumed with the house having some equity he would be able to remortgage no problem but apparently not.

The equity influences the interest rates that are on offer. What matters is the affordability of repaying the debt owed. Lenders currently assess affordability at a notional interest rate of 7.5%. this is irrespective of the rate being applied for.

As a guide a new lender would base affordability on a 20 year term at £540 per month. With only a £1,000 of income a month appears potentially a no goer.

You need to sit down and discuss how money can be found to at least pay something into the mortgage account. However small it is. Consider letting a room to a lodger to boost income.

silvercar

If his monthly payment is £370 a month, how much would it cost to rent in his area? Obviously owning has repair and maintenance costs too, but it is a reasonable comparison to make to see if he really is "wasting money" by holding on and waiting for any capital growth.