some help in paying debt

Edwards Finance > Debt Help

Q. Any advice, anyone? Our situation, succinctly: - Currently living in the southeast - Moving to Devon, Nov 2003, with secure civil service job - recently discovered wife was expecting - wife would like to stop working (I agree) if possible - looking into purchasing a property on our joint salaries before wife takes maternity leave - Once we own a house in devon my employer will pay our rent locally until the move, although we can't rent out the property in devon I have been exhausting myself studying the mortgage system in the UK for weeks now (I'm American, wife is English). Don't know what's scarier, that 'gazumping' is legal or that it's common enough to have become a slang term. Our strategy in buying now result in an extended study of rental prices in Devon for what we want (two bedroom). Rent is around 475. If our house payment is only a 10-40 pounds over that, doesn't it make sense to buy? And if necessary, my wife could start work again. I'm wondering if we are required to let the banks know my wife is pregnant, as we have not. We have found houses in the sub 90k region, and we can manage a 5% deposit. I am pulled between the necessity of getting monthly payments down and a fear of rising interest rates. We could get great discount or tracker mortgages but get walloped by variable rates in the long term. Four paths are materializing before us: 1. Bristol & West offers a 5 year fixed rate at 4.89%. Very stiff repayment penalties, and we'd have to pay a bloody MIG (~1350 quid), tied in for 5 yrs. 2. Nationwide has a 5 year fixed at 5.49%. Allows up to 500 pounds in overpayments each month without penalty, no MIG or valuation. Tied in for 5 yrs 3. Nationwide has a 4.74% base-mortgage-rate offer (variable). No MIG, no val. fee, and it can be left penalty free. I have spoken to them, and this can be changed to their fixed rate at any time for a 150 pound arrangement. The switch takes two weeks, according to them, which makes me wonder if I'd have time to switch before they raised their fixed rates (how long does it take the banks to react?). Of course, if the rates go down, I'm better off, and it means I can switch to an even lower fixed rate. 4. Not buy at all. Play it safe, keep renting (aka flushing money down the toilet), and hope for a housing market meltdown.

A. Many mortgage companies have a section in their application form that says something like "do you expect your financial situation to change in the next 24 months - eg house move, payrise". If you are asked this question, then you certainly have to disclose your wife's pregnancy and plans to stop work. I would be very surprised if you are not asked that question or a similar one, as it is related to your ability to repay your loan and the banks are very interested in information like that! On a related point, make sure you have your wills sorted out. Not a nice thought, but if you and your wife both were to die you would want your child's financial future to be assured, and without a will you can't really have any idea of what would happen to your estates. If you have any assets in America you need to be sure that they are covered - wills are an area where you really need specialist advice. Don't forget that you don't have to stay with one lender for the whole term of your mortgage - also don't forget that you may not stay in the same house for 25 years. On average we Brits move home every 5-7 years, so you may find yourself redeeming your mortgage due to house sale. I am not qualified to give any financial advice, but I would consider just choosing whatever mortgage you think is best in the short to medium term and then making sure you review your situation regularly.

Ask Edwards a Finance Question

Other Questions:

any help for the debt problem

am in about £30000 debt with credit cards loans etc i am having problems paying now and am just paying of one card with the other is there any way out of this black hole_I normally advise: Pay the minimum possible on all debts and whatever el...

I owe taxes to the IRS for the years 2000-2004, and have an installment agreement to pay it back. I was married last year (2006) - will my new husband be responsible for this debt? I realize that if I file a return that shows I am due a ref...

I am in arrears of £6000 with my mortgage company. I was initally in debt for £10000 but have brought this down. But they have sent me a letter toady saying that they are going to go to court to take repossesion of the property. I can pay anoth...

have unfortunately gotten into a credit situation where I have good credit but have two credit cards which are currently killing me and it won't be long before I have quite bad credit. Namely, a Visa card with ridiculous interest rates (because...

How to solve Nigeria's foreign debt problem?_Personally, I think Mr Willimas is making a great mistake by saying that we should lengthen the time of the debt. This I believe would increase the total amount owed. What I believe should happen, is...

Edwards Finance Menu

Ask a Question
About Us / Me
Contact Me
Privacy Policy

Sitemap

My Favorite Sites

PFBlog
Google Finance
Yahoo Finance
Motley Fool
Nveille's Financial Blog
AllFinanceMatters
Free Money Finance
2MillionBlog
The Terror Finance blog

Q&A Subjects