100% mortgage advice/ help

dantheman24

HI i have a 100% mortgage (175k) that was 4.9 fixed rate for 3 years. it ends next year.

what do i about remortgaging I'm thinking 6 months before the end - ..start looking. yes? Also , shall i just revert the the SVR?

ps.. i'm skint

any help would be nice...

Dan

lisyloo

Hi Dan,

Sorry to be the bearer of bad news but no-one is doing 100% mortgages any more so you cannot re-mortgage.

You can ask your existing lender whether you can go onto another deal but many only work 3 months ahead.
You could also go onto the SVR.

Either way it's going to be a higher rate.

If you are skint already then you need to think about what you are going to do to raise the extra money.

Can you increase income? Get a lodger? Get an evening job?
Or can you cut back spending elsewhere?
If you are going for the latter option then I suggest you post what you ar spending your money on currently.
I know this seems a bit personal but people will be able to come up with suggestions if you post up the info.

seikothrill

This is not a criticism of Dan the Man but this example shows why it is of the utmost importance to take out a repayment mortgage especially when borrowing 100% +.

People should not be taking out 100% + mortgages on interest only.

A budget should ideally be calculated on repayment terms and if it is not affordable then you should NOT proceed with mortgage.

I fear this type of scenario will become more & more common.

Dan - I wish you the best of luck

Locoblade

I don't think he's said whether he's on interest only or repayment?

Although unlikely, Im not sure its a cast iron guarantee that you won't be able to remortgage. If it is a repayment mortgage you'll have paid off maybe £10k in capital by the time your deal ends next year, so it just depends on what your house is worth in a year's time as to whether you can remortgage at a reasonable rate or not. If you got the house cheap or have added significant value to it, it could still be worth more than what you paid for it, so you may just scrape into the 90% band at a push. Check local house sale prices now to see if they're still above what you paid. If not, then it seems likely to only go one way in the next year (down), which would likely leave you with nowhere to go but onto your existing lender's SVR.

Locoblade

BTW, just to give you an idea on how much it will cost you, Im currently remortgaging the same amount as you over 21 years coming off a 4.9% fix and even with the best deals available (at around 5.95%), the monthly repayment will be £100 a month higher than they are now (for repayment mortgage), so if your SVR is nearer 7% and you don't have any equity to get those better deals, then you're looking at £200 a month to find.

dantheman24

after 3 years i will have paid off around 36k -- its a repayment mortgage.

seikothrill

Dantheman - being on repayment is great news.

Original property purchase price - £175000
Original loan - £175000

Assuming your calculations are correct then outstanding loan will be approximately £139/140000.

Providing your have not and do not miss any future payments then assuming your property went up in price and is now decreasing I would guess your property will be valued at near to the original purchase price.

Assuming your property is still valued at £175000 and your outstanding loan is confirmed at £139/140000 you will looking at a re-mortgge of approx 80%LTV which should allow you a good number of products to choose from.

Good luck

beecher

dantheman24 wrote: »

after 3 years i will have paid off around 36k -- its a repayment mortgage.

How did you get to this calculation? I wouldn't have thought you'd pay that much off in 3 years without seriously overpaying. By my calculations you'll probably have paid £36k into the mortgage (£1,000 x 12 x 3), but your interest payments still have to be added.

Locoblade

Agreed, to have cleared £36k of capital you'd have needed to be overpaying about £600 a month if my spreadsheet is correct.

Paying the regular £1000 / month which is what you'd have been asked to pay by the mortgage company will have only reduced your capital to around £163k after 3 years, the rest of the money you've paid in covers interest for that period.

sarah_elton

First step is to find out if you CAN remortgage. If you can't, it's moot - you go on the SVR.

You need to know how much you owe (agree it's not £36k paid off unless you've been making massive overpayments?). Phone up the mortgage lender and ask. I'm with HSBC and every time I log in on Internet banking it shows me my mortgage outstanding on my accounts list. :eek: I got my £115k mortgage at 4.99% nearly three years ago (three years in January), and the balance owed is down to just over £110k, despite me having made about £18k worth of repayments.

Then you need to know what your house is worth, because when you apply for a new mortgage they will do a valuation survey again.

Then you'll know if you'd be applying for a 100% mortgage, 95%, etc.

Once you do, people on here will be able to give you better advice on your options as it affects the products/rates open to you.

Ian_Griffiths_Halifax

Dan, who is your current lender and how long did you take the mortgage over?

You must have taken out either a very short term mortgage or overpaid as pointed out above, to have got it down by £36k in 3 years. At a guess you would have needed to be paying around £1700 per month including interest, to get it down to that balance.