Help! Urgent advice required

hpjpmpmp

Hi,

Looking for some advice on our mortgage.

We have had an offer on our property of £160 K. We owe £127 k on it.
The property we want to buy is £260,000. Our current mortgage is with Northern Rock but the deal ends on October 1st. Payment per month was £750.

NR have offered us a mortgage on the new house but the rate is not great - between 6.5 and 7 percent.

Our joint income is approx £56,000.

A financial advisor reckons that this is best deal out there for us. Can Payments interest only would be £1170 per month and repayment £1400.
Can anyone advise any better deals out there?
Thanks

minimike2

How much mortgage do you want on the new house?

Toughluck

Sounds as though you would need between 85 and 90% mortgage based on your current mortgage size and the sale price (taking out a few grand for estate agents, survey and sols fees).

Depends whether you want all the hassle to apply to another lender (assuming you have no redmeption charge with N Rock) for the sake of at best 0.50% lower than what they are offering you.

hpjpmpmp

minimike2 wrote: »

How much mortgage do you want on the new house?

We need a mortgage on new house of £ on the new house.
We have had an offer on our house of £160k. We owe £127k on it.

This leaves us with a deposit ot £33k. Minus cost of moving, estate agent fees and solicitor fees plus ten grand we need to renovate the place we have a deposit of £19k. We would need to borrow £231k on the mortgage.

Any ideas? We could pull together at a push an extra £6k to get deposit higher.

minimike2

If you have a decent enough credit history then I do not see why you cannot get a better deal than that.

Do you have other credit outgoings or any bad debts?

There are deals available based on those figures at lower interest rates with average fees.

If you want to fix your rate then 6.5% would be about the best, it all depends on what your attitude to risk is, but 7% is definately way above what you need to be paying.

hpjpmpmp

Thanks for that.

we have been offered a rate of 6.49 percent on a fixed rate mortgage, with repayments of £1524.55 per month, or an interest only with repayments of £1222 fixed for two years.
do you reckon this is ok?
We have no bad credit, in fact our credit rating is great. We have no credit cards etc and only other debt is a car loan with the bank - on this we owe £6500 and repay £168 per month back over three years.
thanks

minimike2

What is the arrangement fee on that? I would be wary about fixing for just two years if its a high fee (im guessing its £995 if its the product im thinking of)???

6.49 at that LTV for a fixed is about the best you will get, but dont be cought out with big fees. Im sure £995 is about the level of fee for most the products in that profile. You should be able to fix at the same rate for 5 years for between £995 - £1495 fee.

hpjpmpmp

hi
arrangment fee is £999.is it ok to go interest only for now - we want to start a family so need to keep payments down for now. should we go interest only tracker at £1175 a month currently or fixed interest only at £1222?
i am so confused with all this!

minimike2

Ok, yep product sounds about the best you will get...but why only 2 years fixed? Especially if you are wanting to start a family....you might want to consider a 5 year for longer term stability. Unless there is a specific reason for a 2 year deal they do not currently represent good value (and by good reason I dont mean so that your broker can re-do the mortgage in another 2 years to get another commission!!)

Trouble is with interest only is that you will get used to the lower payment. You may have good intentions now of going back onto repayment, but the reality is that you will spend the money on other things and then wont swap it back. If you can afford the payments on capital and interest then that is the best way to do it, and lets face it, the difference between the two is pretty small.

Cat695

Do you realise that your new house (if you buy it) could be worth less than you owe with the way things are going?

hpjpmpmp

it could be. however, it is a home we intend to stay in for many many years so to be blunt i dont care'@!