Remortgage advise

weimaranermerlin

Hi there,

I’m coming to the end of my mortgage deal with the RBOS in December this year and I’m absolutely terrified as to what awaits us. At the moment we are on a discounted rate.
Our mortgage is £148 k which is split 50/50 between repayment and interest only. The house is worth about 300k and we have a loan with egg plus 3 credit cards with a low lifetime rate to pay off (all in all about £35 K :eek: ). We have never had any ccj's, defaults' arrears etc and our joint income is about 60k a year before tax.

Where do I go from here? Any advise welcome!

[EMAIL="abuse@moneysavingexpert.com?subject=Reporting post http://forums.moneysavingexpert.com/showpost.html?p=12875477"][/EMAIL]

herbiesjp

First port of call would be your current lender. Not sure if they will offer anything as yet

That is a lot of debt to be carrying in the background, however your income is fine to support that kind of borrowing

Once you have seen what your lender will offer, you can then compare against the rest - at 50% loan to value (value of mortgage against value of property) you will have pretty much most deals open to you.

You can either do this research yourself or via a whole of market adviser.

There seem to be some lenders starting to reduce rates at the moment - although there are already some godd deals out there

Really depends on what you are looking for

happybroker

I think you should be ok. If you are really worried about it there is no harm in starting the bal rolling now and getting to proper advice to put your mind at ease.

People will post on her lambasting your credit card debt etc which could just wind you up more. Speak to a good whole of market broker, they should be happy to go through your options with you now and then if you want to they can progress that through to offer so you have some security.

weimaranermerlin

Thanx for that. I have been using L&C for my last 2 remortgages and will get the ball rolling ASAP.

I know the CC card debt is bad but we just sold some shares and will manage to pay 10k off that immediately which is a great relief!

In the past I didn’t get myself tied in for any longer than 2 years…. I know there is no hard and fast answer to this but I feel I’d go for the same timescale unless anyone has any better ideas?

herbiesjp

The cost of arrangement fees every 2 years will eat into any savings you make by getting a more competitive interest rate.

Why not look for a longer fixed rate?

How is your monthly disposble income income/monthly budget? Do you have a lot of leeway?

Reason I ask is you may want to consider some of the good lifetime tracker deals that are out there, and therefore avoid those recurring re-mortgage costs - you'd have to be happy with a rate that could fluctuate though

weimaranermerlin

That’s an interesting one since so far I have never paid any fees. Obviously that has changed now and I need to take that into account.

I only ever did 2 years at the time because I didn’t want to be tied in for too long unless the product become uncompetitive. I also have never looked at a fixed rate because they seemed far too expensive.

It’s just a completely new ballgame with all the changes that have been going on. Disposable income vice we are quite tight and I was hoping to keep the mortgage payments fairly low although I am aware that we probably face quite a increase in what we pay (at the moment we pay just under £600/month).

happybroker

with some of the lower rates available to people in your situation the tracker will allways be "competetive" as it will be a representation of what is happening in the market place at any given time (due to the fact it tracks base rate).

The main thing to consider is "can I manage if rates fluctuate?" and if the answer to that is "probably not" or "perhaps but it worries me" then fixed rates will give you stability to take away this worry.

herbiesjp

weimaranermerlin wrote: »

That’s an interesting one since so far I have never paid any fees. Obviously that has changed now and I need to take that into account.

I only ever did 2 years at the time because I didn’t want to be tied in for too long unless the product become uncompetitive. I also have never looked at a fixed rate because they seemed far too expensive.

It’s just a completely new ballgame with all the changes that have been going on. Disposable income vice we are quite tight and I was hoping to keep the mortgage payments fairly low although I am aware that we probably face quite a increase in what we pay (at the moment we pay just under £600/month).

Indeed - not sure when you took out your last deal, but things have changed dramatically over the last couple of years in terms of fees, and more recently in terms of overall lending and mortgage criteria.

What is your current rate at the moment, if you are on a variable rate? Seems strange that you believe your disposable income is tight, but have never gone onto a fixed rate to alleviate the stress of potential rate rises - if things are indeed tight as you say, you may want to consider a fixed rate.

In comparison to tracker rates, they are currently more expensive, however some lenders are starting to reduce some deals, and if rates were to start increasing, your fixed rate could then become cheaper than the tracker (plus you do not have the stress of looking at interest whilst on the safety of your fixed rate)

weimaranermerlin

I think I’m prepared to take a risk TBH so I like the sound of the tracker more and more.

Main reason for the limited amount of disposable income is obviously the CC debt which we are trying to resolve in case things got really bad and the mortgage rates would shoot up. If that was to happen I could always increase my working hours ( work PT at the moment) to find the difference although that would bye the last resort really since I already can’t find enough hours in the day!

herbiesjp

A tracker sounds like what you are looking for then

You'll need to weigh up all the options, to see which best suits you then, and which offers the flexibility you are are looking for