Moving house. Need to borrow extra

Simongooner1

Hi there

My house is on the market and we have seen a property we like. We'll obviously be lucky for things to work out but you neve know. We'll need to borrow extra to finance the move, I just have a few questions for some of the experts on here!

My house is on the market for 190k. The house I've seen is 145k although they would probably come down a bit. My current mortgage is for 112k so i'll need to borrow an extra 60k. My wife is on maternity leave and our current combined income is 48k. We will probably have to go interest only for a few years until my wife can work an extra day.

The house we've seen is a nice sized family house (we have 2 kids), we will be pushing ourselves quite hard but I'm sure we can afford the increase. We live in an area were house prices are stagnant but still expensive.

Firstly, what is the best way to borrow the extra? I can port my current deal but can't increase it at the current interest rate. I'm tied in till next April. Bristol and West will lend me the extra but at their standard variable rate. I can then remortgage the whole lot for a better overall rate. Is there a better way of obtaining the extra.

Hope this is clear(ish)!
Thanks, any thoughts would be useful, it is quite a scary mortgage!
Simon

Kez100

This is your home you are talking about. I wouldn't be comfortable taking on a 'scary mortgage' with a young family. I would far prefer to be as sure as I possibly could that I would always have a roof over my head than gamble with one of the most important things in my families life.

Simongooner1

I would never ever gamble on my family's future, especially my two children. We can afford to make this move, allbeit with tightening spending. 3.5 times income does not represent a huge risk imo, but the numbers are still quite 'scary'. We'd be buying a nice sized family home which we would intend to stay in for a significant period of time.
I appreciate your sentiments however.

Moggett

I would think very carefully about going interest only. IMO it is false economy and what if your wife can't get a job or is unable to work in the future?

If you insist on going interest only then the method you suggest ie porting and borrowing the extra at SVR would be the best way at present as you only have a relatively short time until you can consolidate the whole lot. Any other method would not be cost effective.

Simongooner1

sorry, I meant 245k!!! Big big typo!!
thanks for advice.
My wife is a teacher working part time (2 days) and could up it when she wants really.

Graeme_P

Simon

I am in a similar position, have a house on the market where I would look to increase to a mortage of around £170k on a £275k purchase. Depends on a number of things about feeling comfortable - I am 32 so if I did this I would reset the counter to a dreaded 30 year repayment and try and overpay a hundred or so a month to reduce the term.

Believe it or not, after a ridiculous meeting with my current lender they offered me a far better deal through a broker than me going in face to face! I could get the extra on a 0.17% above base rate tracker with no arrangement fee, no tie in and no redemption etc. Also if I had less than 12 months to go (currently have 15) on existing tie in they would waive the penalty and do me any of their new deals as long as the tie in matches or exceeds 1 year.

Simongooner1

Thanks Graeme, it may be worth speaking to my lender again to see what deal I can thrash out. Failing that I'll speak to a broker - I definitely don't want to pay any redemption penalties.