What are my options?

davilown

Hi everyone,

Just after some advice about moving and mortgages but a bit of background first.

We have a house valued at £325,000 (next door sold 3 months ago at this price and they are virtually identical) and a remaining mortgage of £202,376 on a 5 year fix with the WestBrom at 3.39%. The mortgage is 20 months into the fix with 21 years and 4 months remaining @ £1104 pm + £96 overpayment.

2 years ago my wife moved jobs and now does a 80 mile round trip 3 or 4 times a week. Pretty straight forward easy road with few busy periods due to the journey timings (before 7am and after 8pm). I cycle/run 5.5 miles to work Mon-Fri 8-5 from our current house.

We would like to move closer to my wife's job, though to take her commute down from 40mins to 20 mins we would be looking at an extra £100,000 of borrowing to get a property similar to ours now (3/4 bed detatched with 2 teenagers at GCSE/Alevel age).

Earnings wise, I'm on £44,000 and my wife is on £40,000.

So my questions are:

Can we afford the larger mortgage (we are mid 30's now so is a longer term possible?)?
Is it possible to get a second mortgage rather than have to pay the ERC (approx £10,000)?

Many thanks in advance

Thrugelmir

In principle your lender could allow you to retain your existing mortgage product and let you top up with additional borrowing. This would avoid the ERC. A question worth asking them to help you evaluate your plans.

How comfortable would you be with a £300k mortgage? Extending the term may improve affordability now. But will leave you exposed to a different interest rate climate. Lenders assess affordability at 7% interest rates to give you an indication as to how conservative the basis on which money is advanced actually is.

Personally I would direct higher overpayments at the existing mortgage. To reduce the gap to be bridged.

davilown

Thanks Thrugelmir - I'll speak to the lender. Our original mortgage was £250,000 and with additional over payment we were paying £1500 and would feel uncomfortable at around £1900 i.e. we would have to look at memberships, eating out less (all the niceties in life!).

We'll look into overpaying more from Sep when my car loan ends (will free up £250 pm).