Re-mortgaging Query - Will I still get 100%?

sallydecker_2

Hi folks, and excuse me if this has been asked a hundred times already.

I'm a first time buyer and three years ago bought my house from Barratt's (don't say a word, I know...) for 156k.

40k of this was offset by Barratts for a period of ten years, whilst the mortgage I got from Abbey was for 116k. I have been paying this on a tracker for the last three years and have never so much as been late for a payment. My worry is that in the current financial climate, many many people keep telling me that when I come to re-mortgage next December I will be asked for a deposit or face losing the house as nobody is offering 100% mortgages anymore.

I know little about the world of finance, I'm an engineer and so my area of expertise is playing with big cables and occasionally making things explode. I'm pretty terrified about the prospect of losing the house, as I have not enough savings to lay down a deposit.

Can anyone tell me if what I have been told is accurate? I'd just like to be able to put my mind at ease, I'd be amazed if this was true as most guys I know have 100% mortgages and we'd all end up on the streets....

Victor.

sammyjammy

Your first step is to ask your mortgage lender what products are available to you, they may be willing to do a product swap without a valuation, you don't say whether you are on a repayment or interest only? If you move to another lender then you will be required to have the house valued in which case it sounds unlikely you'll get someone to lend you what you need. As a last resort you can just move over onto the Standard variable rate of your current lender. This obviously depends on you have the extra money required to pay the new rate, if you do then concentrate on overpaying if you can until you get your mortgage down to a level you can comfortable take out a new fixed rate/tracker.

Sam

lisyloo

It's half true.

When your deal runs out you will probably find it difficult to remortgage.
This is because you mortgage may be 100% or even worse (in this climate of falling house prices) it may be >100% "loan to value" which is often called LTV.

This means that no other lender wants your business because the lending climate has changed significantly.

However whilst you were only on a 3 year?? special rate, you would have taken out the mortgage for much longer (25 years).
Therefore lossing the house is completely wrong.
You can stay on your existing deal.
The problem is that this will be on the lenders SVR.
So you can stay on your deal, but you probably can't get a better deal with Abbey or anyone else.

The standard variable rate on Abbeys website is 7.09% so you need to be prepared to pay this.
You can find calculators on the web to tell you what your new payments will be.
So your home is safe provided you keep up payments on this higher rate.
Your chance of getting a better deal are low until you can get 10% deposit together.

sallydecker_2

Ah, thanks very much guys, that puts my mind solidly at ease, I was expecting to have to pay a higher rate and am quite prepared for that, seems some of my friends are scaremongering rather more than is necessary.

Many thanks for the advice.

Victor.

lisyloo

You should talk to Abbey 3 months before you deal ends about switching onto a different deal.

How strick they are about LTVs is entirely up to them.
In this climate I think lenders are being very risk averse, but there's no harm in making a phone call in case they do let you have it as things will be different (one way or the other) in 12 months time.

Actually I suspect they will be worse but no-one knows.
It's certainly worth a phone call (at time tme) because if they say yes it could save you thousands of pounds.

feisty1

victor........pls speak to yr lender...u think u have 100% deposit but not the way people on here are thinking....im presuming the 40k was a builders deposit, so u have mortgaged 75% of the property......however at the end of 10yrs u need to pay yr 40k back to barratts..day at a time! dont start worrying about that now!