Remortgage, does this make financial sense?

[Needachange02]

I have £74000 left on mortgage. Mid fifties, 10 years left on mortgage although my plan is as I remortgage with a lower balance to repay additional amount to reduce the term.

DP has sold his house, will complete mid January. Our plan is to live in my house and we will buy together in a year or so. With the equity from both houses we would have £120000 deposit. New house would be approx £180000-200000.

I’m concerned about having a mortgage of that size at a time that we could both be maybe cutting hours at work and being able to have more down time. I don’t honestly know how much longer I can work in current job, social worker, usual high, complex case load and poor management team.

I also have £8000 on a credit card that I pay over minimum payment for each month and move to different 0% offers as the previous one ends.

I discussed with DP my worries re a higher mortgage and suggested we look into him buying into the house and remortgaging to give us a lower monthly outgoing.
I would request to borrow another £10000 to pay credit card off and top wedding fund up. We would like to marry in the next 18 months due to his parents health.

So mortgage would be £35000 probably over 5 years. I’d use some of the money I’d save with lower mortgage payments and DP’s contribution to the household to pay additional funds into my local government pension and add to savings.

I’d appreciate thoughts on this please.

I'm not clear on your proposal, sorry

Firstly you talk about buying together, minimum of £60k, but possibly £70k mortgage to support the house purchase.

But then you talk about DP buying the house and you requesting a further advance to pay off your CC.

Then you mention a mortgage of £35k?

Sorry I just don't follow!

Sorry! What I mean is rather than buy a new place together, that DP buys into my house and we have a mortgage of approx £35000.

That amount would include additional funds to pay off the card.

I think the most sensible thing to do would be to jointly own your home with DP paying off the reminder of the mortgage using the money from his property. If that means he hasn't put in enough to be 50/50 then maybe he should offer you a bit more towards it but if you are planning on getting married then you would own the property 50/50 any way.

If your fiancé is selling his house why can't you just get your house valued and see how.much equity you have in it then he uses his equity to buy into your house equally. Eg if you have £40k equity in your house he pays in £40k then you add him to deeds. Your mortgage payments would immediately become lower then you could pay off your very high credit card. Don't borrow more money for a wedding.

Personally I wouldn't be taking ona new mortgage at this stage of your lives. As pp have suggested best if your DP buys into your current home using the money from the sale of his.

Don’t underestimate the difference between him buying into ‘your’ house and you both buying a different house together. At least, based on the experiences of friends. Because or or the other, or maybe even both, of you are likely to always see it as ‘yours’.

I echo this

also, I think a new or bigger mortgage at your age is fine to buy a new house. It’s less fine to pay off debt or pay for a wedding.

Don't underestimate the cost of moving. Dp buying into your house makes sense as long as you work out the best option.

That is what we are thinking. He would use his equity to buy into this house.

This is one of my concerns. DP says that he doesn’t care where we live and when we talked about it he was happy to look at the finances of it.
But I’ve been in his position and am aware of how the house never really felt like it was mine.

Thanks for your perspective. I think I’m looking at reducing overall monthly costs.

The wedding part we can rethink. We don’t want a massive wedding, but if the outgoing were less we can then save more to top the wedding fund up.

Don’t be fooled by thinking putting debt onto a mortgage is cheaper as the rate is lower. Work out the total you’d pay back as adding to a mortgage with a much longer repayment may actually cost more interest in total.

So,
Scenario 1: At aged 57, you and (by then) DH buy a £200,000 house with £120,000 equity and a £80,000 mortgage, which, (although joint as a married couple) your share is a £40,000 mortgage. By then (2 years time) I would hope you would have paid off your £8000 credit card, being payments of £334/month (no interest as you keep moving to 0% offers). Wedding done, small only what you can save and pay for. Presumably during this 2 year time DP also pays you rent as well as contributing to household expenses equally? So you have more disposable income under this scenario.

Or

Scenario 2: You’re figures aren’t clear, so I have inferred the figures as best I can, but a current mortgage of £74,000, which would become a £35,000 mortgage after DP gives you an amount equal to the same amount of equity you currently have (presumably £47,000), which you would use to pay off your credit card (£8000) and put the rest on the mortgage (£39,000). Leaving you both with a smaller mortgage and more disposable income.

The equity figures don’t seem to add up to have £120k for the new property, but the info given isn’t exactly clear. On what you’ve said I’d go for scenario one, and reassess in 12 months, with a view to either then switching to scenario 2 or recommitting to scenario 1 and buying the house together. I think you think scenario 2 is a way to give you more free cash now, and pay off your credit cards, but you’ll end up maxing them out again to pay for the wedding, and (worst case scenario) you’ll have given away half of your only asset and if things with DP don’t work out, you’ll find yourself without a home or having to buy him out and an even bigger mortgage at an even older age. Remember under scenario one DP should pay rent as well as expenses which would increase your disposable income, but protect your asset in the short term.

That’s more or less the case. If DP pays into this house he will pay £55000 in, which would reduce the mortgage, if we only borrowed purely for the house and not to pay card, to £24000. I realise this would likely change dependant on a new valuation.

Based on current amount left owing and the lenders assumed valuation, which is fairly accurate based on what similar condition houses are selling for in the road, equity is £77000.

I no longer have the card, and have no intention of ever having one again.
Most definitely will not use one for the wedding. We already have money saved for the wedding, would just top the fund up but with reduced monthly expenses can save more.

I have considered the if things go wrong issue. If that were to happen and we were in current house, I would need to pay him out and figure things out from there.

Live together for at least 2 years before you commit financially to each other.

If your hous suits you both that would make more sense. Moving house is very expensive. Lots of legal fees and searches to pay.