OT My Mortgage.

Realy

Just trying to test the water.

I think I have around 30%ish equity in my property and I am coming to the end of a fix rate in April.

I am thinking of paying the redemption and setup fee for a new mortgage (£2500ish)

Will it be worth it

My thoughts are

A) To got to a lifetime offset tracker so i never have to remortgage again. (saving £X)

What will my valuation come out at in April next year? (as at the moment i can get the best rates)

C) what mortgages will be available next year?

D) If I ever get in trouble I dont have to worry about SVR (even though 40% is already on that)

E) Should I post this on the mortgage board

PS this is not a WUM post I am serious. As at the moment I think the cost outweighes the risk but if anyone as a different view it would help.

ad9898_3

Mmmm, its a difficult one, your 30% equity could be down another 10% by April, which may restrict your market further. However 2.5k now is hard to take.

IMO i think the mortgage market will be at least as tight then as it is now if not more so. Interest rates are likely to fall in the coming months but I'd be surprised if they made any impact ( lenders will probably drop headline rates and put the difference on the arrangement fee)

Its definitely worth looking around for a good 'long term' deal now to avoid the re-mortagage every 2 years issue thats hurting a lot of people now, you would of course then avoid the forced SVR if your equity dropped significantly.

Realy

ad9898 wrote: »

Its definitely worth looking around for a good 'long term' deal now to avoid the re-mortagage every 2 years issue thats hurting a lot of people now, you would of course then avoid the forced SVR if your equity dropped significantly.

I can get BOR BR +.49 for life of mortgage (hopefully, waiting for AIP)
I think that is a great long term deal,
The £2.5k I am happy to add that for the mortgage and offset it aginst my savings at the moment. I want to build up good savings in the offset account (all going well) to lower my term.

dannyboycey

I would personally be looking shorter term. See if you can find something that'll suit your budget for the next 2-3 years. By which time theres a good chance that the market will be stronger and therefore competitive in terms of the deals around. It's a risk, as these things always are.

However, if you're very risk averse, then maybe you would feel comfortable with the peice of mind that would come with a longer term tie-in. At the end of the day, it's whether you want to take a gamble or live a little more safely.

dannyboycey

Realy wrote: »

offset account

I'd also look into this carefully. For example, would you be better with an offset, or with a mortgage that allows overpayments?

ad9898_3

Realy wrote: »

I can get BOR BR +.49 for life of mortgage (hopefully, waiting for AIP)
I think that is a great long term deal,
The £2.5k I am happy to add that for the mortgage and offset it aginst my savings at the moment. I want to build up good savings in the offset account (all going well) to lower my term.

Yep,that seems pretty good, rates will stay low for a while I think, whether its right that they are this low to start with is a different matter.

HPI would never have gotten out of hand like it has if rates hadn't been cut so aggressively since 9/11, but hey, we are where we are I suppose.

Realy

dannyboycey wrote: »

I would personally be looking shorter term. See if you can find something that'll suit your budget for the next 2-3 years. By which time theres a good chance that the market will be stronger and therefore competitive in terms of the deals around. It's a risk, as these things always are.

However, if you're very risk averse, then maybe you would feel comfortable with the peice of mind that would come with a longer term tie-in. At the end of the day, it's whether you want to take a gamble or live a little more safely.

I think that is more of a gamble because if my circumstances change I may not be able to change lender in 2-3Y also the best rates are 4.99 at the moment.
Also if i was to go to a short term I would leave it untill the current deal expired.

Offsetting is the same as overpayment (in my eyes) just that it is liquid funds I can get to if the poo hits the fan.
Also you can overpay as much as you want.

dannyboycey

Realy wrote: »

Offsetting is the same as overpayment (in my eyes) just that it is liquid funds I can get to if the poo hits the fan.
Also you can overpay as much as you want.

There are some good offset and overpayment calculators around that might help. I think it depends on how quickly you intend to pay off the mortgage as to which product will be best. There's some useful stuff from the FSA too that might be of some help:

http://www.fsa.gov.uk/tables

Realy

Thanks for your help mate but i have already done that stuff.

I think I may not of been clear.
I suppose what I am trying to say is do people think I will make the £2500K back over time
E.g, No remortgaging, rate, etc.

Or would i better of with the April gamble?

WTF?_2

Realy wrote: »

Thanks for your help mate but i have already done that stuff.

I think may I not of been clear.
I suppose what I am trying to say is do people think I will make the £2500K back over time
E.g, No remortgaging, rate, etc.

Or would i better of with the April gamble?

You ought to be able to do the calculation yourself as to how the 2500 quid spent on the arrangement fee will work out over time.

I personally think rates are going to come down in the near term - inflation control will be thrown to the wind to 'save the economy' (too late, Gordon).

Anyway, this should be good for you but who can say where LIBOR and swap rates will be. The govt ran such a lax policy for such a long time that the markets have taken rate-setting into their own hands and the headline interest rate has now decoupled from the real world rate.


When time comes to remortgage, I'd look at what long term fix deals were available and if you felt that the deal would result in a monthly repayment rate that you'd be comfortable with, I'd go for it regardless of the possibility that variable or short term fixes might lead to lower payments at some indeterminate point in the future.


Personally, I'm planning on buying with cash. No mortgage.

Realy

!!!!!!? wrote: »

1)You ought to be able to do the calculation yourself as to how the 2500 quid spent on the arrangement fee will work out over time.

2)I personally think rates are going to come down in the near term - inflation control will be thrown to the wind to 'save the economy' (too late, Gordon).
Anyway, this should be good for you but who can say where LIBOR and swap rates will be.

3)When time comes to remortgage, I'd look at what long term fix deals were available and if you felt that the deal would result in a monthly repayment rate that you'd be comfortable with, I'd go for it regardless of the possibility that variable or short term fixes might lead to lower payments at some indeterminate point in the future.


4)Personally, I'm planning on buying with cash. No mortgage.

1) well £100 per year over 25 years obviously, so cheaper than geting 5X 5 year fixes OK?

2) OK thanks that is helpfull

3)But would i not risk not getting the best deals? Also losing this deal? I am happy with the current payments and can afford raises of quiet a few% at the moment. But i do not get if you are saying go for the longterm deal?

4) Thanks but that is not much help to me unless you are giving me the cash.;)