Remortgaging - are we doing the right thing?

mortgage-dunce

Hi all,

I have posted before about our problem but am going to harp on about it again as it's exercising my brain on a daily basis.

We're going through the process of remortgaging with Abbey. They are our only option (other than sticking with Kensington at end of fixed rate, which is not a preference due to their high SVR). We can only go with Abbey because of affordability (I work p/t, husband works p/t as he is also studying until June 09).

Because we wanted flexibility (so we could borrow more in next year or two, once husband back working f/t), we have gone for Abbey's flexible tracker at 1.23% over BOE, as this has no tie-in, although we would have to repay legal costs (max £1200) if we ditch within 2 years.

With recent financial scares though, I'm now wondering whether this is a silly idea and we should get a fixed rate instead?

In our circumstances, what do you experts think we should be doing? Tracker/fixed? Would be grateful for any comments!

Thanks.

0james0

Tracker/ Fixed really depends on the person. You mentioned that income is tight at the minute, if rates did rise and your payment went up by say £50 or £100 per month could you comfortably afford it? -if the answer is no, despite the fact that interest rates are expected to drop by many, you may find that the security of a fixed rate is better than the potential money saving of a tracker.

Are you 100% sure that Abbey are the only lender who will take you? Have you got your broker to check to see who else would, is he whole of market?

grogdog

how much are you looking to borrow
what is the ltv
what is your earnings
any credit commitments?

dimbo61

Both HSBC and YORKSHIRE have put up the interest rate on there fixed rate deals today.
Who said rates were coming down ?

mortgage-dunce

thanks for all your responses!

I'm using London & Country, who claim to be whole-of-market, and Abbey is the only one they have come up with. I phoned up First Direct myself and they couldn't help. Our income is too low currently.

We are remortgaging for £102000
Valuation has been done but not heard yet. I'm guessing £160k, maybe a bit less depending on how valuer is dealing with the market
Earnings combined around £26k but Abbey are accepting tax credits, child benefit and possibly student loan (not sure about latter)
No credit commitments

We could afford up to £200 a month more but it would be tight. If it was just for a few months, I'd be happy. But what if rates suddenly go mad?

It's just annoying that the timing of our fixed rate ending is 6months before my husband can start working f/t again. Of course, when we fixed it originally, we had no idea that he'd be studying at this time!

So for almost 3 years I've been looking forward to being free of Kensington, and now that we can, we're not in a good position to remortgage. It's maddening, I tell you, maddening!!!

Thanks again

mortgage-dunce

Bumping, in case anyone has a comment this morning?

Thanks!