remortgaging - longer term +overpay VS short term

Hi

Sorry if this is not the right discussion board but I'm hoping to remortgage soon as a single applicant and had been hoping to be mortgage free in the not too distant future!
Now my husband and I have split that has all gone out the window and I'm worried if I can take over the mortgage or not.

As an applicant I am thinking I may be more likely to get a mortgage if I went for a longer term (more affordable) as oppose a short term mortgage with higher payments - this really sticks on my throat as want to pay off as quick as possible

I think I can afford the higher payments but the mortgage company may not agree. If I were to take on a mortgage where overpayments are allowed this would give me flexibility to control my finances but also to overpay and get my mortgage paid of quicker.

The question is (I'm sorry if I appear thick) does it work out the same? So I can have a mortgage for 15 years which is say £500 a month or a mortgage for 10 years which is £700 a month. If I took the mortgage for 15 years but paid £700 a month out of choice as an overpayment would it work out the same? Or do I lose out somewhere along the line with interest rates being worked out on a longer period of time even though I will pay it off quicker?

I'd only want to be tying myself in for 2-3 years so I would be able to (possibly) pay off a lump sum and renegotiate my mortgage deal then anyway.

Replies

  • bexster1975bexster1975 Forumite
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    Hello

    Sorry to hear about changing circumstances.

    As far as I know, there will be no difference between the two scenarios you describe. The only issue with overpayments may be if your mortgage product restricts your overpayments ( often it is 10% of the outstanding balance per year). honestly if I were you I would go for the longer term for now. It allows you flexibility for the time being and you can always reduce the term later.

    Best of luck and Happy New Year

    Bexster :)
  • Devons_bestDevons_best Forumite
    23 Posts
    Thank you - that's what I'm thinking - I just really want to be able to secure a mortgage and go from there!
  • edited 27 December 2015 at 9:55PM
    Penny_BridgePenny_Bridge Forumite
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    edited 27 December 2015 at 9:55PM
    Hi there,

    A new chapter begins for you and I wish you all the best. If it was me I would allow myself the buffer of the longer term to begin with and get on my feet and use to having sole responsibility for a mortgage. I would probably tie myself in to a fixed rate so that I could budget accurately. If there was anything left over I would pop it in a savings account and look to pay a lump sum once the fixed rate was finished and change to a flexible mortgage. I was on a fixed rate for 5 years and it flew by. I now overpay regularly and hoping to be mortgage free in 4 years.

    Good luck with your journey.

    Penny
    Note to self: The kids are alive & well with a bright future ahead of them.
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  • Devons_bestDevons_best Forumite
    23 Posts
    ooh good luck being mortgage free! I'm aspiring to be - but probably not in 4 years!
    Thank you for advice. I'm thinking you're right! I have lots going on in my head and probably over-thinking lots of things!
  • newgirlynewgirly Forumite
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    Hi, I would go for the longer term for sure, you are more likely to get the mortgage and circumstances can change. We are currently paying a lot per month to clear a mortgage term that I shortened from 32 to 12 years a few years ago, even though we earn more money now we are unable to change from io to repayment or to extend the term. Better safe than sorry, all the best.
    MFW 67

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  • Devons_bestDevons_best Forumite
    23 Posts
    Thank you - I can see the sense in this - I'm thinking i will need to get some advice. good luck with your mortgage.
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