Advise on remorgage needed

guns4

Hi

Help needed please. Our current fixed morgage deal ends in about 12 months time and i am wondering if I have any options when it is time to re morgage.

We transported our deal about 18 months ago to a new property, situation is that the house was bought for £128k with a £126k morgage (100%) with house price dropping on average 8% in the last year, that leaves the house at a value of around £116k. What I worry about is will I have any options, With the state of Northern Rock and my lower house value I do not think I will get a good deal from them and rate is likely to increase, and I doubt that I will be able to get a competitive morgage elsewhere as there are no 100% morgages anymore.

what do you think?

Locoblade

Are you interest only or repayment? Either way I don't think you have the option of getting a remortgage with anyone (including NR) unless your LTV is below 100% as a minimum (more likely 95%), so you may have to stay with NR on their SVR until you have paid off enough capital to drop below that level.

The other problem is, that level is a moving target with house prices dropping, and is also a subjective target because you don't know exactly what valuation a particular surveyor will give when you do eventually apply to remortgage.

guns4

Repayment

Sorry what is LTV?

_Andy_

guns4 wrote: »

Repayment

Sorry what is LTV?

Loan-to-value, how much you owe versus the home's value.

E.g. if you owed £90,000 and the house was worth £100,000, the LTV would be 90%

sarkin

LTV = loan to value

12 months is a long time but with house prices sliding you are not going to have any equity and will have to stay with NR, unless you can pay down the mortgage.

sarkin

Andy types quicker than me

beecher

Looks like you may well end up on the SVR so best to work out what your payments will be at this rate. Someone else will tell you what it is - 7% or so. Might add £100 or so to your payments but you can work it out for yourself here

http://www.moneymadeclear.fsa.gov.uk/tools.aspx?Tool=mortgage_calculator

guns4

will interest rates come down anymore? and will the banks be passing that on?

beecher

guns4 wrote: »

will interest rates come down anymore? and will the banks be passing that on?

A SVR of around 7% isn't that bad if you look at historical interest rates. I certainly wouldn't be holding out hope that the SVR is much lower in a year's time. Personally I think interest rates will go down slightly by the end of this year, but may well go up again by next year - obviously this is just a wild guess though as no-one knows for sure. I would definitely start budgeting for a potential £100/month increase by any means possible - second job, sell car, ditch sky etc