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Remortgaging Decisions
couttleberry
Posts: 45 Forumite
Time has come to remortgage.
We originally took out an endowment mortgage to run to 2014. However, some years ago we switched to a repayment mortgage and kept paying the endowment premiums. The endowment was for £47,000.
When we last remortgaged on moving to this house, we took out a mortgage to run to 2019, but intended to pay it off when the endowment matured in 2014.
The current position is we owe roughly £33,000 on the mortgage. The house is worth around £200,000k. We are on a joint income of around £24,000 plus tax credits as we have 5 children. (Oldest is 13).
As I see it we have a number of options.
1) Switch back to interest only as even with a shortfall, the endowment should pay off £33,000, and save around £200 in a high interest can't get at it type account.
2) Take out another repayment mortgage to 2019 and pay off when endowment matures in 2014.
3) Take out repayment mortgage to 2014 and enjoy the fruits of the endowment. (I think this will stretch us financially though).
4) Another of mortgage term/possible savings account and paying off mortgage early when endowment maturers in 2014.
An additional factor is that we don't want to have too much money 'sitting about' in 2014 as oldest 3 children will be university age or thereabouts and we would be penalised on any means tested university finance. (We live in Scotland).
My head is absolutely spinning just now and I think I may have made the whole thing too complicated by thinking of too many options.
Any help much appreciated!
We originally took out an endowment mortgage to run to 2014. However, some years ago we switched to a repayment mortgage and kept paying the endowment premiums. The endowment was for £47,000.
When we last remortgaged on moving to this house, we took out a mortgage to run to 2019, but intended to pay it off when the endowment matured in 2014.
The current position is we owe roughly £33,000 on the mortgage. The house is worth around £200,000k. We are on a joint income of around £24,000 plus tax credits as we have 5 children. (Oldest is 13).
As I see it we have a number of options.
1) Switch back to interest only as even with a shortfall, the endowment should pay off £33,000, and save around £200 in a high interest can't get at it type account.
2) Take out another repayment mortgage to 2019 and pay off when endowment matures in 2014.
3) Take out repayment mortgage to 2014 and enjoy the fruits of the endowment. (I think this will stretch us financially though).
4) Another of mortgage term/possible savings account and paying off mortgage early when endowment maturers in 2014.
An additional factor is that we don't want to have too much money 'sitting about' in 2014 as oldest 3 children will be university age or thereabouts and we would be penalised on any means tested university finance. (We live in Scotland).
My head is absolutely spinning just now and I think I may have made the whole thing too complicated by thinking of too many options.
Any help much appreciated!
0
Comments
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The question is, what payment is comfortable and where will your money work hardest for you?
If you can get investments that pay interest higher than your mortgage rate then it may be worth considering. (Do not forget tax on savings if not tax free account).
If you can afford to get everything repaid in 6 years then that would only ever be a good thing and then you can let the kids be your next mortgage for the next few years whilst at university rather than them getting into loads of debt.
At the end of the day, you need to work out what your goals are and then work backwards on how you can achieve them.I am a Mortgage AdviserYou should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0
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