Advice needed

Candika

I have no idea if this is the right section to add this question. I am looking for some advice. I share a mortgage with my sister and we have owned our house since 2004. We both contribute the same money towards the mortgage but our initial deposits were me 40% and my sister 60%. In 2006 I found myself in financial trouble so we got a second mortgage worth £60k to run along side the original. We now find ourselves at the point that we owe about £120k on the mortgage. My sister has suggested that if I start to pay the mortgage in its entirety that will then pay off my outstanding debt and ensure that I am 50/50 in terms of owning the house apart from the initial deposit which she paid slightly more. The problem is I am not sure if I can afford to pay all the mortgage as this would leave me with out the ability to have any savings and I would literally just be able to buy food each month. I need to work out whether I would be financially better off if we sold the house now and I got a smaller flat to move into. I live in london so this won’t be cheap. I don’t know where to start with working out what to do. Any advise would be appreciated. Is there a way to get free financial advice somehow ? 

AdrianC

Give us a bit more detail on the numbers, and we might be able to help you.

Candika

Thanks Adrian. Not sure about the numbers to be honest I have suggested that it might an idea to get our house valued. Possibly it’s worth about £750k at the moment. I live in a 4 bed terrace house in south Ealing. I take home about 2400k a month. I initially put in £40k deposit. I am 51 and in my last month of paying off the last of my personal debts so my credit score is looking ok now which could I guess mean I can take out maybe a ten year mortgage if I need to.  I am on my own and don’t have a partner kids have left home. Our mortgage is 1350k a month plus bills. 

davidmcn

Also try to use more useful subject lines than "advice needed". Almost everybody here is looking for advice.

Mutton_Geoff

Candika said:

Advice needed ..

Put the type of advice in the title to help readers know whether to read your post or not.

Candika

I am trying to work out whether I would be financially better off selling the house now and paying what I owe now through the sale of the house so I can  downsize but still need to stay in london for my job. Or sacrificing and living with no money until the mortgage is paid off. My head is frazzled and I am terrible at money/maths

AdrianC

Candika said:

Thanks Adrian. Not sure about the numbers to be honest I have suggested that it might an idea to get our house valued. Possibly it’s worth about £750k at the moment. I live in a 4 bed terrace house in south Ealing. I take home about 2400k a month. I initially put in £40k deposit. I am 51 and in my last month of paying off the last of my personal debts so my credit score is looking ok now which could I guess mean I can take out maybe a ten year mortgage if I need to.  I am on my own and don’t have a partner kids have left home. Our mortgage is 1350k a month plus bills. 

So paying the mortgage all by yourself is still going to leave you £1k/mo for your other outgoings...

That's a hell of a lot more than many people have.

Candika

This is very true. Although it will be less cos I will still have to pay bills on top of the £1350 a month. I am wondering if I am better of testing this for year to see how it goes. I just want to get to the point in my life where I have to worry less about money and be able to save which I’ve never been able to do so far. After the initial remortgage I got into financial trouble again and have just paid that off and sort of debt free now. 

Tammykitty

Hi,
Figure out how much you are comfortable paying and discuss it with your sister? And what equity spilt she would be happy with
Just a bit confused about the £60k remortgage - who has been paying this - just you? or has your sister contributed to it too (if so why...), but judging by the logic she must have been, so she has helped you out significantly already, paying years of interest for your benefit..

IF there is £120k left in the Mortgage, is your sister not still losing out...or did she get £30k of the remortgage - all seems confusing too me..

your sister paid £20k extra towards the deposit, and you are happy to reflect this in the ownership..as in she gets the first £20k from any sale and the rest spilt 50/50 (again very generous, as the £20k would have been a much larger proportion of the equity when the house was bought than it is now).

Yours sisters suggestion on the face of it, looks as if she is behaving in a very generous way towards you, and has been willing to help you in the past too, she seems to making this suggestion for your long term benefit

As i said, consider how much the mortgage you could cover, ie: 75% (just over £1000), and then come to some sort agreement over the % of equity owned at the end of the mortgage (work out what you are both happy with - 55%/45% etc)
If you pay 75% of the remaining £120k - thats £90k, and your sister pays 25%, thats £30k - so you will be paying £60k more than here over the course of remainder of the mortgage...

NameUnavailable

Without knowing all the facts no one can tell you if paying the total mortage is fair to you or not. You need to work out the sums, does it seem fair to you?

If the property has gained significantly in value since you bought it then yes it may be better to sell up, split the proceeds appropriately and for you to buy your own place with the proceeds/mortgage. You can get a much longer term than just 10 years if necessary. Is your sister happy to sell/move too?

Maybe you should make an applicatoin in principle online with one of the lenders to see what your likely lending limit (and payments) will be like?

Alternatively can't you make some agreement with your sister that you pay more, but not the total, and you take an proportionate amount of the equity when you eventually sell?

dimbo61

Good points !
You have a lot of equity in your home well done

You can get some very cheap deals at the moment and even at 51 you should be able to get a 17/19 year term for the £120K and clear the mortgage before you retire !
Do you have a good safe well paid job with a good pension ?
Without sitting down with you and your sister to look at the whole picture !
Does she live in the property with you ?