I'm starting to worry, please help!

Garethmac

We have just completed on a house for £183,000 (been ongoing since Jan), We took out a interest only 100% mortgage for 2 years on 1.36 above the base rate, so rough payments are around 970 a month in current climate. Our idea for the interest only was that we would do that for the 2 years then switch to repayment when I will be earning that little bit more money, and my wife can finish all her certification exams (accountant) where she will be earning a lot more. Now i'm getting really worried that in 2 years we won't be able to switch to repayment or even get a mortgage for the 183,000 without a hefty deposit which we just can't save for. Am I right to be feeling worried?

Thanks,

Mac

MortgageMamma

Well theres no point sweating it now you have already completed! sorry if that sounds flippant but its true.

Financial markets can and do change quickly. Nobody actually knows the position the market will be in in two years time. I think you should try and overpay the mortgage now as much as you can, OR put some cash into savings and see how things work out.

EdInvestor

Some people would regard you as very lucky, one of the last 100 per centers to slip under the wire

When you come off your rate you can go on to your lender's standard variable rate (SVR) which in many cases is not much different from what they are offering on their deals. So I wouldn't worry, they can't kick you out into the street.

Kez100

Unless you want to sell, concentrate on supporting your other half while she studies for her accountancy exams.

mystic_trev

Kez100 wrote: »

Unless you want to sell, concentrate on supporting your other half while she studies for her accountancy exams.

I doubt he'd be able to sell. I should imagine he's in 'negative equity' already!:eek:

petermb_2

I am sure your current lender would change your mortgage to repayment without remortgaging. They would normally do this for a relatively small administration fee

PasturesNew

Garethmac wrote: »

Our idea for the interest only was that we would do that for the 2 years then switch to repayment when I will be earning that little bit more money, and my wife can finish all her certification exams (accountant) where she will be earning a lot more.

And that is precisely what will automatically happen at the end of the fixed term. You'll just start paying the normal mortgage amount. No special deal with up front fees required. So just rest easy, do nothing .. and it'll just happen. You won't find yourself having to pay out anything when your deal finishes unless you choose to apply for one of their deals, along with the hefty up front fees etc.

Worry over, you can put the cat out now and go to bed.

Take a look in Jan/Feb 2010 to see if that's what you still want.