Posted on 31 January 2011 by donna
My partner and I have a 125% mortgage which our 5 year fixed term runs out in August this year. We are starting to get worried about what we do then because we want to keep our house but don't really know what will happen or what to expect. With the housing market in the situation it is can you give us any advice. We are paying interest only and are struggling with that some months. Do you think we should sell before August, even though we will make a loss or do you think we will be able to keep it?
If you haven't done already you should speak to your mortgage lender. Whilst they may not allow any new borrowing they will have facilities and schemes set up to help existing borrowers.
Usually you will switch to your Lenders standard variable rate when your initial fixed term runs out and whilst this rate will vary, you may find it is lower than you are currently paying. There may also be some new Fixed rate deals available to you.
I do not think that you need to consider selling at this time, especially as you would still be subject to an early repayment charge. You would also be expected to repay all the debt secured on your property and this just may not be possible.
I recommend you speak to your mortgage lender now and then depending on their response speak to your local Citizens Advice Bureau or an independent mortgage adviser.
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