Worried

Angel555

Hi,

Just wanted to share my worries and ask for opinions.

I purchased my lovely house last june and stupidly took out a two year fixed rate (wish it was longer).

I took out a 95% mortgage and am now worried that when i come to remortgage next june I will be in negative equity and my mortgage payments will increase by alot.

Like hundreds of people i am praying that this will improve.

what are peaople doing to help themselves in this situation and how bad do you think the situation will get.

Wishing everyone financial health
xxx

epsilondraconis

Save as much as you can so when you come to remortgage, if your house price as dropped and you find yourself in negative equity, you can use that money to ensure your loan to value (LTV) amount isas low as possible.

beecher

Overpay as much as you possibly can in the next 12 months - it will improve the LTV you will have in June, and get you used to paying more for the mortgage. Don't bank on things improving, instead cut back as much as possible and fling it onto the mortgage. Good luck.

ziknik

Save every penny you can. Read the DFW forum and upping your income.

It’s going to get much worse in my view. 1990 will look like the boom years.

No point worrying, there’s nothing to gain from it. You’ll be surprised at what you can achieve in a year

happybroker

It's a bit of an unknown at the moment as to what things will be like this time next year, certainly people in my world are hoping it will be nothing like it is now but no one can say for sure, although I suspect there will be some pretty scary posts on this thread but don't panic, its a waste of energy.

At the end of the day, all you can do is try and get the balance of the mortgage down by as much as possible over the next year by either overpaying if you can or saving wisely so you can make a lump sum reduction when you switch. This would be a great thing to do anyway but the current situation might give you a bit of a nudge.

Good luck

Bargain_Rzl

I agree with everything said above - I'm in my first 2 years of a mortgage as well, and it has always been my intention to make sure I have blitzed a big chunk of the capital by the time my fixed rate ends. I hope you have enough slack in your current budget to make a real difference to the outstanding balance and keep yourself out of negative equity.

Ivan_Konstantinov

good advice from all the clever people here, you wont be the only one in this situation next year

Angel555

Thanks so much to all for there advice/opinions.

Just say the worst happens and I do go into negative equity what will happen when my fixed rate ends?

Bargain_Rzl

If you can't get another fixed/tracker deal you'll end up paying your lender's standard variable rate.

This may not be too terrible in the short term - I'm with Nationwide and last time I looked their standard rate was very similar to their current fixed rates on offer - but obviously it leaves you open to the volatility of rates.

beecher

Keep an eye on the SVR of your lender to give you an idea of the worst possible scenario, and try to overpay the difference between what you're paying now and what you'd be paying then if at all possible. Obviously I don't know how much your mortgage/salary is so this may/may not be possible of course.

Bargain_Rzl

Thought I'd better add to/ clarify my earlier point:

Bargain_Rzl wrote: »

If you can't get another fixed/tracker deal you'll end up paying your lender's standard variable rate.

You don't have to be in negative equity for this issue to rear its head - as your original loan was 95% LTV, there's a very strong chance that your lender is no longer offering fixed rates at high LTVs even if you are breaking even on equity.