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  • FIRST POST
    huangdi
    any feedback on my mortgage situation
    • #1
    • 19th Jan 11, 7:30 PM
    any feedback on my mortgage situation 19th Jan 11 at 7:30 PM
    hello all, please lend me your eyes for a minute or two if you would be so kind.

    just want to explain my situation and see if anyone can offer some advice/criticism

    Long story short, me and mrs H plan to move abroad middle of this year as both of us do not feel at home where we are now. we have mortgage at 3.99% now on SVR as follows: (was a 100% graduate mortgage in 2006. Big mistake i know! ) roughly 405 month repayment, we are paying 500 + whatever is in the offset savings

    Value of house : 88000
    Mortgage left(not including offset savings) : 75000

    we have savings of 6000 in the offset account and a car which is paid off and worth around 5500 and have no cc debts. we can save 1800 a month which is going into the offset account, which will add another 10000 to the pot come June. house has been up on market for 5 months now, lowered price 11% already, no viewings!
    the main point of my post is that i am worried when we come to move, we are lumped with the house (i am wary of letting when im away in a foreign country a long way away, although if anyone has experience of this - all advice welcome). i want to put some sort of plan in place now. However, with the imminent threat of rate rises, should i remortgage on the basis that i will not be able to get rid of this house and go for a fixed rate until i eventually sell it. i dont want to be left with a larger repayment value after July as who knows how long it will take to sell, and im not totally against the possibility of keeping the house empty for a few years and ride out the storm (seems such a waste to a scrooge like myself)

    another quick point. if i cannot sell at all (i am trying) , then would i be able to get an interest only mortgage before i go, as then me and my wife would be able to show that we have sufficient funds on expiry of mortgage. as i am not 100% sure i can get work straight away abroad, the best chance of getting the interest only mortgage, would be before i go. ( i take it i have to inform them of any change of income situation?? - then this idea would be a non starter)
    so many decisions to make
    sorry for the long windedness. you should have seen the rough draft!

    TIA
Page 1
    • beecher2
    • By beecher2 19th Jan 11, 8:20 PM
    • 3,631 Posts
    • 4,653 Thanks
    beecher2
    • #2
    • 19th Jan 11, 8:20 PM
    • #2
    • 19th Jan 11, 8:20 PM
    Cut the price further - the value's obviously not 88000 if it hasn't had any viewings, let alone offers.
  • huangdi
    • #3
    • 19th Jan 11, 8:23 PM
    • #3
    • 19th Jan 11, 8:23 PM
    Cut the price further - the value's obviously not 88000 if it hasn't had any viewings, let alone offers.
    Originally posted by beecher2
    its on offer at 77995 now, im willing to drop it as low as 70000. painful, but if it stops the sleepless nights then i guess its worth it
    • Engeroosi
    • By Engeroosi 20th Jan 11, 9:57 AM
    • 483 Posts
    • 318 Thanks
    Engeroosi
    • #4
    • 20th Jan 11, 9:57 AM
    • #4
    • 20th Jan 11, 9:57 AM
    where are you advertising the property,maybe you should change who you are selling it through.
  • huangdi
    • #5
    • 20th Jan 11, 10:52 AM
    • #5
    • 20th Jan 11, 10:52 AM
    its on Rightmove and through a local estate agent which is one of the biggest in the area.
    • VT82
    • By VT82 20th Jan 11, 12:29 PM
    • 1,031 Posts
    • 872 Thanks
    VT82
    • #6
    • 20th Jan 11, 12:29 PM
    • #6
    • 20th Jan 11, 12:29 PM
    Taking the mortgage you need to be 75k - 6k savings = 69k, and your value to be a generous 78k, your loan to value is pushing 90%. You will not find an attractive fixed rate compared to the rate you are on to make this worthwhile. Combining this with the flexibility to sell you will lose if you fixed, and fixing is the wrong idea.

    Convincing your lender to allow you to change to interest only will be nigh on impossible without a named investment vehicle in place.

    If you were to 'leave it empty' to 'ride out the storm', I assume you mean you would rent it out? Otherwise the money you would be throwing away in mortgage payments propping up an empty house would more than swallow up any gain you would eventually get from a rise in house prices. You could find an agency that would take rent it for you and guarantee to pay in the event of voids. It would be a lot more expensive than a normal agent, and might mean the mortgage isn't 100% covered by rent, but might give you more peace of mind and we be cheaper than paying the mortgage on an empty house..
  • huangdi
    • #7
    • 20th Jan 11, 1:24 PM
    • #7
    • 20th Jan 11, 1:24 PM
    Taking the mortgage you need to be 75k - 6k savings = 69k, and your value to be a generous 78k, your loan to value is pushing 90%. You will not find an attractive fixed rate compared to the rate you are on to make this worthwhile. Combining this with the flexibility to sell you will lose if you fixed, and fixing is the wrong idea.

    Convincing your lender to allow you to change to interest only will be nigh on impossible without a named investment vehicle in place.

    If you were to 'leave it empty' to 'ride out the storm', I assume you mean you would rent it out? Otherwise the money you would be throwing away in mortgage payments propping up an empty house would more than swallow up any gain you would eventually get from a rise in house prices. You could find an agency that would take rent it for you and guarantee to pay in the event of voids. It would be a lot more expensive than a normal agent, and might mean the mortgage isn't 100% covered by rent, but might give you more peace of mind and we be cheaper than paying the mortgage on an empty house..
    Originally posted by VT82
    thanks for taking the time to reply

    a lot depends on what the mortgage company values the house at i guess. you make a very good point regarding losing the flexibility if going to fixed etc, thanks for that.
    i guess it is balancing the thoughts of dropping the price drastically against the thought of my house selling for such a low price and feeling like im losing a lot. difficult times but i know im not in as bad a situation as some others.

    i want the feeling of a fresh start, so selling is my main preference, but at the same time, its getting to be like a noose around my neck to be honest!

    agency are doing a promotion next week for a 5% deposit for the buyer, so i hope it works!

    also, , i wasnt aware of any company renting the house out if im not in the country. any ideas of reputable companies to approach? il have a google to see what i can find.

    cheers for the info
    • VT82
    • By VT82 21st Jan 11, 12:01 AM
    • 1,031 Posts
    • 872 Thanks
    VT82
    • #8
    • 21st Jan 11, 12:01 AM
    • #8
    • 21st Jan 11, 12:01 AM
    Regarding agents to use for renting out your house, I think that would be more a local agent than a national chain so I can't help you there.

    Also note that you would need to obtain consent to let from your mortgage provider. Some will increase the interest rate on your mortgage immediately, some will give you a while on your current rate but then require you to convert to a buy to let loan after a year or so (higher rate, and difficult to remortgage on with an LTV higher than 75%).

    Good luck.
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