Re Mortgage - Please Help!!!!

swanseajack61

I purchased a property almost 2 years ago and our deal is due to come to an end in 5 months time. However I am really really worried as during the last 2 years myself and my wife have fallen on hard times and have defaulted on all out credit cards and a loan we had. We took the decision to default everything in order to keep paying the mortgage and our other essential bills.

All our creditors have now accepted payments directly or via a debt recovery agency.

My concern is will I be able to re-mortgage with anyone in a few months time. My rate at the moment is 5.5% and will revert to a variable rate should I stay with the same company.

First question when I took the mortgage out I was under the impression that the variable rate I will revert to will depend on the bank of England base rate. At the time of applying for the mortgage this was 5% as it is now. Does this mean the variable rate I was told I would revert to will be the same as the bank of England rates are the same or will this change given the current climate? Am I wrong thinking this?

Secondly I know I am going to struggle to get a re mortgage but if was to look about what sort of rates would I be looking at. I have numerous defaults all in my name but none against my wife and the debt we have is over £20,000.

Would I be better off taking the variable rate that I revert to or try to negotiate a new deal with my current lender and hope I get a decent offer on the basis of me being a customer at the moment, or even look for a new lender.

Any advice would be appreciated.

_Andy_

Which lender are you with at the moment?

swanseajack61

I am with a company called MAS No 5, they are part of the Britannia Group.

MYLITTLESISTERLOLA

Standard Variable Rate is usually 2% or more above BOE base rate in my experience, I doubt there is any mortgage company offering 5% mtgs at present. I'm no expert but try to see what available at present, the market has changed over the last 6 mths. Also might be worth getting a copy of your credit file to see what shows up.

HelpWhereIcan

The first thing to check is what deals your current lender will offer you.

As long as you are not looking to borrow any extra many will transfer you to another deal without neccesarily having to do any credit checks or underwriting which is likely to get you a better deal than would be available with a lender who would accept 'numerous defaults' in the last 2 years.

which lender are you with currently?

With regards to the rate your deal reverts to, you will need to check your offer and tell us exactly what it says there about the rate at the end of the deal.

I suspect that it will say something like "a rate based on Bank of england base rate plus X". Depending on what the 'plus X' is you may actually be better off on that than switching lender - even with a perfect credit history. (I have a customer whose deal with A&L is going to revert to BoE + 0.99% - You won't find many deals to switch to that has no fees or no ties that are better - he is better off where he is).

HelpWhereIcan

swanseajack61 wrote: »

I am with a company called MAS No 5, they are part of the Britannia Group.

Who was the mortgage originally with (before being sold to MAS no 5) - Platform?

I suspect it might be as many Platform deals revert to Base Rate Trackers - about BBR + 1.95% I think which would give you a rate of about 6.95% which could be quite competitive for your circumstances now ... depending on equity etc

swanseajack61

It was with a company called GMAC, since taking the mortgage I found out they are usually used for people with bad credit but they offered us a better rate than most did at the time as we had a perfect credit history.

My current deal states that 5.59% fixed for 2 years. From 1/1/09 my mortgage will revert to standard variable rate applicable at the time. The rate that will be the standard variable rate which is currently 7.24%. (this was the rate quoted by GMAC and not MAS NO 5 who we are currently with)

This deal was struck when the bank of England rates were at 5%.

i have no intention of borrowing any more money and would be happy to stay with the same lender. Do you honestly think they would just move me onto a new deal with no credit checks?

HelpWhereIcan

GMAC SVR is currently 6.99% - give MAS No 5 a call to check what rate will be applied to your account. GMAC are not currently ofering new deals to customers.

Their SVR on their mainstream range was 7.24% in early 2007 so that tallies.

If you get the 6.99% it is likely that you will be better off leaving it as is (especially in the short term), but no one knows what the market will be like in 5 months' time so you may have to keep an eye on it. GMAC may return to the market and start offering retention deals.

In practice, there is not much you can do at the moment - just keep an eye on things and do your best to ensure that mortgage payments are kept up and your reduce your other debts by as much as poss.

swanseajack61

You dont know how much better you have made me feel so thanks very much.

One more question, as my mortgage was sold to MAS NO 5 then any retention deal would need to be made with them. So when my deal is up I could quite possibly go on another fix rate with them without any further credit checks or fees.

Do you know who MAS NO 5 are? I was under the impression I would now become a customer of Britannia. As they seem to offer pretty decent rates I was hoping I may be treated as one of their existing customers when looking for a new deal.

Once again thanks very much.

HelpWhereIcan

swanseajack61 wrote: »

You dont know how much better you have made me feel so thanks very much.

One more question, as my mortgage was sold to MAS NO 5 then any retention deal would need to be made with them. So when my deal is up I could quite possibly go on another fix rate with them without any further credit checks or fees.

Do you know who MAS NO 5 are? I was under the impression I would now become a customer of Britannia. As they seem to offer pretty decent rates I was hoping I may be treated as one of their existing customers when looking for a new deal.

Once again thanks very much.

You will need to check with them as to whether they would offer you a retention deal - especially one of Britannia's deals. It will be solely at their discretion as they are not really the Britannia and not obliged to offer you a new deal.

MAS No 5 will be a 'Mortgage Servicing Company' owned by Britannia. They will have bought the rights to collect the payments and service the loan from GMAC and/or may be being paid a fee to administer your account.

They may have retention products to offer, but you will need to check with them for those (if any at all) that apply to your account.

They have to honour the original terms & conditions of your mortgage offer with GMAC and this would normally include the SVR unless something in the terms and conditions gives the company buying your mortgage the right to set a different SVR (you will need to read your offer and mortgage terms and conditions to find out) hence the reason I said to check with them what rate would be applied to your account.

In normal markets GMAC was a lender very much reliant on selling on their mortgage book to raise more funds to lend - now that market has gone they are no longer lending.

mummytofour

I was with Gmac and they sol;d me on to mortgage express. Anyway my deal ended in Nov and like you my credit was not perfect first I even knew was when I was turned down for a mortgage with another lender else ( blame my dh!) Anyway I went into a new deal with mortgage express for another 2 yrs, better than nothing and i think thats at 6.49. Basically I am sure your current lender will be pleased to keep you for another lock in period!