Personal Chickens

Published on August 28th, 2012 | by Pete


Chickens Home to Roost – Mortgage Reality Check

Last week, my wife and I decided to go and have a chat about our mortgage. We’ve been in our flat for just over 4 years now, and have begun to get itchy feet. We didn’t help ourselves by going to see a fantastic house that had all the features we wanted in a home (for me, lots of skylights) for my wife, lots of light generally. It was a good size, and had 3 bedrooms, and a garden, which meant that it was an ideal next step for us.

We never thought we would be able to afford that place, as it was nearly double the price of the place we have now. It turns out whether we could afford it or not quickly became irrelevant, as it was sold a few days later. We decided to go ahead with the mortgage meeting anyway, as I was curious about how much our current provider (Nationwide) would consider lending us.

After a quick lunch (partially ruined by my wife not getting a salad she was expecting – a story for another post perhaps) we ventured into Nationwide. Some 45 minutes later, and we were a bit baffled to learn that the result was basically that we probably shouldn’t have been allowed the mortgage in the first place! My personal debt has such a negative impact on our chances of borrowing more money to get our next home, that it really rammed the point home that I have to do everything I can to get rid of it in the next few years; especially if we want to take the next step on the property ladder.

Given the news that it was surprising that we got a mortgage in the first place, we scarpered, in case they tried to take it off us! The visit was worthwhile though: it re-motivated me to pay off my debts quicker (a post about debt consolidation will follow soon) and we have decided to start making overpayments on our current mortgage, when we have fully repaid the loan we used to get our deposit. This means that in about 4 years we will be in a much stronger position to borrow more, even more so as the way our careers are going we will both be earning more, and will have more equity in our current property. So, if you are thinking about a new mortgage, or extending a current mortgage, is there anything else you can do to get rid of those pesky debts?

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6 Responses to Chickens Home to Roost – Mortgage Reality Check

  1. Mori says:

    You have brought up superb details, thanks for the post.

  2. Thomas says:

    I would like to express my appreciation to you for helping me out of this type of information. I’ve looked throughout the web at other personal finance blogs, and have found some much less personal and interesting posts and articles. This post has given me a lot to think about; much food for thought, as my wife and I are in a very similar postion as yourselves. Thank you so much for this high quality article. I shall recommend your blog to anybody who has questions about this issue.

  3. Angela says:

    Very interesting information you have provided, I appreciate it, thanks for posting it.

  4. Julia says:

    Hello there, I just became aware of your blog through Google, and found it to be really informative. I have some personal expereince of what you’re talking about here, and I shall also be working hard to reduce my debts. I’m sure other people will also benefit from your writing. Cheers!

  5. Matthew says:

    I’m glad that I found – keep up the good work! I’ve been in a slighty similar situation myself, but managed to get my debts paid off. Hope you can make it too Pete, I’ll be watching closely!

  6. Gavin says:

    I’m glad i came across, it’s an enjoyable read! Hardly a surprise in this post though, never trust a banker!

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