Martin's mortgage email has worried me today!! Financial advice pleeease

cici71

Hi. I'm going to put everything personal down to help you understand my situation. I'm on an interest only mortgage. I'm 43. House is worth £330k. Mortgage is £146. Lots of equity. I live in London. I need to stay in the vicinity (kids, work). I want to get out the interest only trap and as I'm 43, i'm lucky enough to be able to pretty much start a new cap+repayment mortgage with an almost usual term. I only earn £24k. I have £15k in debts i want to clear on completion. That's 1st hurdle as they will take my debt into account but have been told terms cld be laid out. After fees, stamp duty, debt etc etc, I have around £150k. Downsizing even to a 2 bed flat is around £250k (annoyingly I cld buy a property outright with that but i'd be jobless in an area alien to me. I need a £100k mortgage. FAR lower than my original and I'd have no debts so much better off!!!. I have an extremely high LTV so can get a v low %. BUT i earn £24k. Martin's email stated from March 2016 (maybe even Sept), new EU rules coming into affect. Do i sell right now??? Or with my circumstances, I cld wait a year or 2 as I have huge deposit? Please help :-)

Thrugelmir

The Mortgage Market Review came into effect a year ago. So there's already plenty to think about already. The EU Directive will have far less of an impact.

May be worth talking to your existing lender initially. As lenders are duty bound to assist. Downsizing whilst at the same time reducing and clearing debt has major benefits. Be realistic in your expectations and their should be an achievable solution.

cici71

Hi
My existing company is Birmingham Midshires - they no longer deal with normal mortgages. Only buy-to-let. I'm on a very good rate so hadn't needed to move....

Morgage_Confused

I wouldent consider interest only as a "trap" as you put it. In fact with a london property you could consider it a real bonus. Your property could well be gaining capital at 10% per year. I would be staying put with that mortgage and looking to pay down those debts whilst your mortgage is still cheap at interest only.

Just my opinion....

cici71

You've got me thinking with that one!!........... :beer:

enjoyyourshoes

There is a cost to downsizing which you have worked out.


You have to balance that cost against the cost of re-mortgaging where you are now.


There may be 'options' on how to build up the capital you are not paying off with the interest only mortgage

Jhoney_2

Will BM let you port it?

I'm in a similar position, different lender, more equity, no debt and would struggle to find a lender for my circumstances. I am hoping to move, so went with a tracker for the time being, so I can consider my options.

No idea what to do yet though... or whether to pay down mortgage capital or save. I think if your rate is less that 2% it would be better to save but i'm no expert and it hurts my head to think about that EU/MMR stuff when I need to buy again - even with a LTV requirement of <20%!