Bigger House - Changing Mortgage

jetsetwilly_2

I bought my house for 47k 3 years ago. Its worth about 70k today.

I have seen a house for sale at 140k, on my current mortgage (repayment mortgage) it would be too costly at around £750 per month.

Now, somebody I know told me to change to an interest only mortgage.

So far is this feasiible?

To make things more confusing, I am hoping to move abroad in 2-3 years time, thus ending my need for a UK based mortgage.

And my current mortgage has 1 year left in the (tie in) offer period fixed rate.

Any suggestions? Can i afford to move?

lisyloo

So far is this feasiible?

Yes, but you must remeber that an interest only mortgage is JUST THAT.
You are only paying interest.
At the end you still owe the capital you borrowed.

To make things more confusing, I am hoping to move abroad in 2-3 years time, thus ending my need for a UK based mortgage.

Personally I think it's risky.
The reason is that all the risks in buying property are to the downside at the moment. You only have £23K of equity some of which may be swallowed up in stamp duty, legal fees, removals, estate agents fees etc.
If house prices fall in the next 2-3 years (AND you are not making any repyaments) then there is a possibility that after selling the house (and estate agents fees again) that you will still owe money.
There is definitely a RISK of this.
The question is - do you think it's an acceptable risk?

And my current mortgage has 1 year left in the (tie in) offer period fixed rate.

Often mortgage lenders will refund any penalty if you take out your new mortgage with them. However this will reduce your choice and probably mena you can't have the best deals around.

Any suggestions?

You need to do a lot more research.
You need to work out the costs of moving this time and selling in 2-3 years time.
Perhaps look at the statistics from the last crash 2-3 years in.
Will £23K cover the transactional costs and the loss in vaue?

I would say that is the possible loss plus transactional costs are more than your £23K equity, then you could be in trouble.
What will you do if you owe money when you want to move abroad?
Will it scupper your plans? Is it worth it?

Joe_Bloggs

There are lots of one off costs in selling/moving/buying a house. Why pay these now and pay them again in 2 to 3 years for the chance of moving into a property you can't afford to buy ? It is money down the drain.
You don't mention how much your current mortgage is for/term of mortgage and hence what equity you have in your existing property. Do you have savings to add to the equity to create a deposit for your next property, home or abroad ? Save up funds to give your self more options for the future is my advice rather than pay fees.
J_B.

jetsetwilly_2

Thanks for the advice.

My current place is a one bed flat, hence wanting to move to get a garden etc. But I see your point, 2 yrs more in the flat will save me money for a better home in 2 yrs time.

Current deal is 22 yrs left to run. I borrowed the 47k full value, and owe probably about 44k still?