Remortgage advice for NR - First time buyer

angeljay

I currently have a fixed 3 year rate mortgage with Northern Rock on 5.99% until May / June 2009. However this mortgage is in both mine and my partners name so are the deeds. We broke up in october 2007 and after speaking to a financial advisor thought it would be a better idea for myself to pay the mortgage until the fixed rate was up as I do not earn enough to show a bank that I could handle the mortgage on my own. Therefore we mutually agreed to not change anything apart from extending the mortgage by 10 years to lower the monthly payments as they original came out of my own bank account anyway.

From October I have been paying the mortgage, I am struggling a litte but do get by. However I am worried about having to remortgage next year, would a bank give a mortgage solely in my name. The mortgage is for £100K but has slightly lowered over the year and a half. I want my ex partners name off the mortgage and the deeds if possible. I am considering just cutting losses and selling up and going back to renting. As I do not have any savings I would have problems with paying estate agents, solicitors fees etc. But then again if I remortgage I would have problems paying these fees for changing my mortgage.

I am quite worried about what to do next, I have chatted to family and they have said I should leave it till next year. But with money issues and the state of the market would it not be better to sell up now. However doing this will mean I incur a early repayment charge for northern rock.

I hope this post makes sense, this is my first post but any advice or questions would be greatly appreciated.

homer_j_3

Your ability to repay will need to be assessed and also the loan to value will have some potential pitfalls.

How much is your house worth?
What is your income?
Do you have any other debts?
What is your credit history like?

angeljay

House was purchased for 84K and we took out 16K on top as loan for renovation and furniture etc.

Not sure how much it is worth now, how would i find this out?

Income 18k - 19k per year before tax

One debt of a credit card of just over £1300.00

Credit history is fine i believe, no problems applying for any credit cards or anything else.

Thanks.

angeljay

Just bump as could do with some advice, should i get my property valued and consider moving now cutting my losses,also would consider a fast sell company for cash to clear most of the debt and just keep some of it running !

homer_j_3

oops - sorry..

You could look at sold prices on your street to get an idea of price. You can get these off many websites - I use rightmove normally. You could ask a few estate agents too maybe? Just ensure you are not given optomisitc valuations if you do the EA route.

You would need over 5 x income to borrow 100k on current income which whilst is not impossible, it would limit lenders and choice. You would also need to be in positive equity to do this now.

If your house is not worth around 105-110k, you will be struggling to remortgage anywhere else.

angeljay

Thanks for help, what does positive equity mean sorry ?

I think I need to get house valued not and see how I come out, as if i sell up and leave now I have an early repayment charge to NR to pay but I think selling up and renting is going to be my best idea.

The only other option is a part ex on some new flats which have been built for shared ownership.

Its all really confusing what to do and selling is going to take time and money !

Also there is only 6 houses on my street and most of them rented out, no house has been for sale on my street since i moved to mine. Other houses in area are no way near similar to my house.

herbiesjp

angeljay wrote: »

Thanks for help, what does positive equity mean sorry ?

Equity = difference between property value and mortgage amount

So if property is worth 100k and mortgage is 90k - it means you have £10k equity in your property (your property is worth more than the mortgage)


However negative equity occurs when the mortgage is higher than the property value

So if you have a property worth £100k but mortgage is £115k, it means you are £15k in negative equity (the mortgage is worth more than the property)

Your best bet, to get a rough idea, is to get a few agents round to give you a free estimate as to what the property could go on the market for - however remember that agents are not surveyors and will try and get as much for you, but it will give you a rough indictaion

You can look at sites like rightmove and nethouseprices, to see what prices property has sold for in your road road/area

The only way you will get a definite, is when a surveyor goes round to give a value on the property

inmypocketnottheirs

How about posting a statement of affairs, listing all your incomings and outgoings to let us see how we can make more money available to you. Also how about taking a lodger in to subsidise the mortgage?

angeljay

Hi, Don't have any extra income apart from my salary. If i can help it I really don't want a lodger as prefer my own space and my own time alone. I know that is selfish.

All my monthly outgoings are carefully checked on an excel spreadsheet, I do have some luxuries such as sky tv and internet but if I got rid of them your looking at only £40.00 a month saving.

inmypocketnottheirs

angeljay wrote: »

Hi, Don't have any extra income apart from my salary. If i can help it I really don't want a lodger as prefer my own space and my own time alone. I know that is selfish.

All my monthly outgoings are carefully checked on an excel spreadsheet, I do have some luxuries such as sky tv and internet but if I got rid of them your looking at only £40.00 a month saving.

Sell up and rent then. Or live an extremely frugal lifestyle. Only you can decide!

angeljay

Im thinking that is the only option, however renting any place that is nice around where I live is very much the same monthly cost of paying my mortgage....apart from the extra insurances Life / Buildings etc

I think I need to wait till my fixed rate runs out next year and see if a bank will give me a mortgage, if i do it now then i will occur the early repayment charge from NR.

If not bank will give me a mortgage I can afford then I have to sell !