re mortgage advice please!

dwkoma27

This is my first post! I would be grateful for any advice.

My fiance and I bought a house in Oct 06. It is a 3 bed new build in the South East and we bought it off plan for £239,999 in a large new development. We got a good deal because we were the first to reserve a house in that building phase. We took out a two year fixed term £239,000 interest only mortgage with Scottish Widows at 5.75% ( ie almost 100%!) The fixed term expires at Christmas.
Since buying our house, several identical houses have sold for £249,999. The builders have now stopped building our particular model of house but are still building others which are reasonably similar. These are still selling for between £270,000 and £295,000 depending on the model of house. I have checked the land registry to confirm this. An identical house to ours was put up for resale at £295,000 a few months ago but was withdrawn from the market after about 8 weeks as it didn’t sell.
My fiance and I earn approx £70,000 between us. I am a solicitor and he is a teacher. We are both at the bottom of our payscales so our salaries should rise about £5000 per year for the next few years. We have a large amount of personal debt ( about £25,000) between us mostly left over from our student days!
We both have good credit ratings and have never missed any credit/loan or mortgage payments. I have checked Experien and Equifax to confirm this.
We are paying out a large amount every month in credit cards/ loans etc. What we would ideally like to do is take out a larger mortgage and pay off all our debt
We would then switch to a 25 year repayment mortgage which would be a lot less than we are paying now. I appreciate this may be impossible in the current market.
We do not want to move house but if we stay with Scottish Widows we will be transferred onto their SVR in Dec 2008 which will put our mortgage payments up by about £200 per month. I understand it might be necessary to do this for a few months but we would prefer not to stay with Scottish Widows any longer than necessary as their rates are not particularly competitive.

Is anyone able to offer any advice as to which lenders are generous with valuations for the purpose of remortgages? It seems to me that the higher the valuation of our house the more options we will have…………….

UK007BullDog

You have a nearly 100% mortgage on a new build which is losing value. Yes it is because the builders are advertising one price but selling at a lot less. I doubt very much you got a good deal for signing up first. Its usualyy the ones signing up LASt who get the better deals as the builder wants to get rid of those and move on to the next project.

You will not be able to remortgage to clear your debts. You will probably find you will have to stay with Scottish Widows ar they made these special deals for Professionals like yourself. This no longer washes anything with the other lenders as long as the housing value falls as much as it is now. You are probably in negative equity. With your combined income you should be able to repay your credit card debt and students loans in one year. But this means you will have to tighten your belt somewhat and start repaying debt earnestly.

If you can get a repayment deal with SW you should count yourself lucky!

dwkoma27

thanks for that. I'm pretty sure I'm not in negative equity because I've been checking the land registry sold prices every month for our estate and similar houses to ours are still selling for about £280,000. They are advertised about £290,000 but selling at £280,000.The last identical house sold about 6 months ago at £265,000- I got that figure from the land registry too. The reason I say we got a good deal is because the other half of our semi detached house plus several others sold for £249,999.
I understand that its a falling market and that new builds are doing particularly badly.
However, I'm basing my information on recent land registry sold prices not builders asking prices.

We have spoken to Scottish Widows and they say no problem in moving us to a repayment deal or a new fixed term. We accept that might be our only option at the moment and will stay with them if thats the only option open to us.

dwsjarcmcd

I'm afraid it's not as simple as the land registry price being right but more about that by definition, the transaction would have been started several moths ago, and with new builds there can be several months between exchange and completion.

You are montoring yesterday's news in essence, and valuers will be aware of market conditions today, and will also factor probable market conditions into their valuations.

David

UK007BullDog

Yup, yesterdays news.

Stay with your lender, you will not find any deals as you are at their mercy due to your 100% loan and probably in negative equity.

getmore4less

dwkoma27 wrote: »

This is my first post! I would be grateful for any advice.
........
........to the important bit.
........
My fiance and I earn approx £70,000 between us. I am a solicitor and he is a teacher. We are both at the bottom of our payscales so our salaries should rise about £5000 per year for the next few years. We have a large amount of personal debt ( about £25,000) between us mostly left over from our student days!
We both have good credit ratings and have never missed any credit/loan or mortgage payments. I have checked Experien and Equifax to confirm this.
We are paying out a large amount every month in credit cards/ loans etc. What we would ideally like to do is take out a larger mortgage and pay off all our debt Is anyone able to offer any advice as to which lenders are generous with valuations for the purpose of remortgages? It seems to me that the higher the valuation of our house the more options we will have…………….

I think you need to focus on the debt and have a plan to reduce this without extending your secured lending.

Have a look at the debt board, produce a SOA/budget and from that develop a plan to get rid of the debt.

Snowballing is the method you need to follow and can be combined with an interest only mortgage to accellerate the payments. don't go to repayment till the debt is cleared.

Rough No's

£70k income is over £4kpm net.

£239k mortgage say 6% thats £1200pm live on £800pm

so that leaves £2kpm to throw at the debts <3years should do it with the pay rises get serious and you could get it down under that.

Then you will have over £2kpm to throw at the mortgage and start filling those ISA's, you need to do this as part of the long term plan because once the mortgage has gone the surplus will be well in excess of the ISA allowances.

Debt board is here for getiing ideas on how to save more money
http://forums.moneysavingexpert.com/forumdisplay.html?f=76

Thinking as though you are in debt is probably the best thing you can do for your long term financial well being, spending less is the key to getting wealthy.

SOA calculator here
http://www.makesenseofcards.com/soacalc.html

A budget is the foundation of good finacial managment , know where every penny goes and you can plan, don't have a clue and you can get into a mess.

Have a good read on that site loads of info on making those cards work for you and links to fantastic resources

To follow on from the debt getting paid off you could investigate www.stozzing.com and the Mortgagefree board here.
http://forums.moneysavingexpert.com/forumdisplay.html?f=98

Long term plans and goals give focus so think about those.


Stick the debt on the mortgage will cost more in the long run and you will not focus on the spends, you have lots of surplus money and probably never save as much as you could I know thats a bit speculative but been there done that.

SouthCoast

How secure is your employment?

Forty-five jobs are being lost at a leading law firm.
The posts are being axed as a result of asb law’s decision to close its branches in Brighton and Horsham and consolidate its business in Maidstone and Crawley.
Last night the firm said 31 people would be made redundant, it had accepted voluntary redundancies from 11 and three members of staff had resigned.
The job losses have come from across all four offices, with the majority of those affected working in secretarial and support positions.
The other staff include lawyers working in residential property.
Of the 31 compulsory redundancies, 13 are in the Brighton office.

http://www.theargus.co.uk/news/business/businessnewsbusiness/3560907.45_jobs_go_as_law_firm_shuts_offices/

dwkoma27

I'm a government lawyer!

opinions4u

dwkoma27 wrote: »

I'm a government lawyer!

I will avoid the more dubious response that this invites!

What would happen if a new government was elected that believed the cost of the state employment machine needed cutting in order to fund tax reductions in order to drive economic revival?

State employees are not exempt from cutbacks and redundancies and there is a strong economic case for dramatic reductions in the number of people on the government payroll.

Not suggesting for a second that your specific job is at risk, but the day a government has the guts to get control of state employment costs and related pension liabilities, the better for the long term future of the nation.

Your working life is a long time - and you will both gain and lose from dramatic changes that you cannot yet see over the coming years.

dimbo61

Hi scottish widows are doing a 5 year fixed at 6.19% 90% LTV
Try and get that deal as you seem to be stuck with your existing lender.
Try and think long term and save every penny you can towards clearing your credit cards first ( LOOK for 0% deals )
Change to a repayment mortgage and check if you can overpay
Clear your debts and GOOD LOOK