Mortgage ending in 9yrs - help 😬

big_gus

Any help appreciated. Bought my former property in 2004 for 315k. Hit problems with my work (unexpectedly) therefore stayed on interest only repayments for many years until financially sound again. Long story short is, I’ve been making overpayments of £1000pm for three it four years now. Mortgage is still £237k and I’m paying it off at a rate of 10k-ish per year. Clearly this is going to leave me a problem when this mortgage ends. What are my options please. Continue with the 1k overpayments each months for the next 9yrs and remortgage at that point? Or try and put something in place before then/right now? Remortgage?

Thank you for any advice. 

Edi81

how old are you? do you earn enough to support a mortgage of £237k?

getmore4less

With £1400pm available £237k @ 1.5% needs 16years.
How much can you afford each month? 
One issue with restructure now is you will probably lose the interest only option committing you to higher payments. 
If your age allows for at least a 16year mortgage and you can find 1400pm there will be options.

silvercar

1.Remortgage now to a longer term
2. Wait and see, with a few years of high inflation you may find your income will increase rapidly and you can afford higher repayments.
3. Plan to sell up nearer the time

big_gus

Edi81, I’m 44. Sole trader, turnover always just under VAT level with income always around 20k. 

GetMore4Less: currently on interest only but pay £1000 overpayment each month. I could make this £1400 (just about). Do you suggest remortgaging now/soon to a new 16yr mortgage with £1400 as my repayment amount each month (switching from interest only)? I’d be happy to have it paid off by 60. I have other savings I can use if required. 

Silver car: I don’t really want to sell that property. It’s kind of my one thing I can leave my son (he’s 10). 

Thank you for your help and input. I really am unsure of best options. 

zagubov

silvercar said:

1.Remortgage now to a longer term
2. Wait and see, with a few years of high inflation you may find your income will increase rapidly and you can afford higher repayments.
3. Plan to sell up nearer the time

This ^^^^^.
You now need a repayment mortgage which are often at a lower rate than an Interest-Only one. We did that and won't be paid off until I'm 65, but we're on two incomes. 
But what's the panic?
Do you own your own property? Can you not pass this on?

sparks6

You're only 44. Remortgage to a longer repayment term and if your overpay on this you will reduce your term anyway. what are your earnings like, do you pass the affordability calculator?

ian1246

If your only 44, remortgage to a repayment mortgage until 67 (23 year term). This will bring your fixed monthly mortgage amount down - giving you flexibility should work become unsteady again. If you have extra £££ each month, you can continue overpaying (most mortgages allow 10% of the remaining balance to be overpaid), but at least if work does drop off, you wont be committed to such high payments.

What are your pension provisions like if you had a period of time where work was unstable? Pension is just as important as mortgage - so it might be worth rediverting some of the spare £££ towards increased pensions rather than overpaying, depending on what they are like!

getmore4less

big_gus said:

Edi81, I’m 44. Sole trader, turnover always just under VAT level with income always around 20k. 

GetMore4Less: currently on interest only but pay £1000 overpayment each month. I could make this £1400 (just about). Do you suggest remortgaging now/soon to a new 16yr mortgage with £1400 as my repayment amount each month (switching from interest only)? I’d be happy to have it paid off by 60. I have other savings I can use if required. 

Silver car: I don’t really want to sell that property. It’s kind of my one thing I can leave my son (he’s 10). 

Thank you for your help and input. I really am unsure of best options. 

the inteest is going to be around £400 thats 1400 with the overpayment that is why I used that s an initial estimate.
If £1400 may be an issue, you have no buffer to get you through a lean time then at 44yo you could look at longer than 16 years still  overpay as much as you can to generate the buffer in the future.
Rates can go up but for now that is not looking too likely for a while..
£237k @ 1.5%
10y £2150
15y £1500
20y £1150
25y £950
Is now the right time to be committing to a higher payment?
Lower payment and save is another option but you need a decent rate for that.
Pension can be a tax efficient way to pay the mortgage debt later in life.
With your declared income/profit qualifying for a £237k may be an issue.

ACG

Your income is £20k and you are overpaying your mortgage by £12k a year...
Add in your interest only payment and that leaves you around £5k a year for food, bills, travel etc? 

Sorry if I am way off the mark but I cant help but think you probably have a a fair bit of cash in hand work - you cant get a £230k mortgage on £20k a year. So your only option is to carry on doing what you are doing until you either increase your income/declare the correct income/bring the balance down a lot unless you want to sell up. 

CheesyWiggles

ACG said:

Your income is £20k and you are overpaying your mortgage by £12k a year...
Add in your interest only payment and that leaves you around £5k a year for food, bills, travel etc? 

Sorry if I am way off the mark but I cant help but think you probably have a a fair bit of cash in hand work - you cant get a £230k mortgage on £20k a year. So your only option is to carry on doing what you are doing until you either increase your income/declare the correct income/bring the balance down a lot unless you want to sell up. 

I’m glad I’m not the only one that noticed that. 20k after tax is more like 1430 per month, so would leave 230 per month for everything else including the base mortgage amount if overpaying by a grand. Must be a fairly complicated financial situation OP, but very hard to help without a better understanding of your situation.