negative equity, fixed rate term coming to end

msg2004

Hello, I bougt an apartment for 200k about 20 months ago & had a good, fixed rate withthe Halifax.

However, the fixed rate will end in 2 months and I'mnot clear what to do because:

I took out a mortgage for a 180k.

The property is now worth approx 125k.

I have no bad credit rocord whatsoever, & always worked, aged about late 20's.

I have no other debts & never have have taken out another loan other than the mortgage.
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never made a late payment.

I have at present about 8k in savings.

My income is 40k+

My question is, will the Halifax be obliged to give me a new mortgage bearing in mind what the government said to the lenders, ie, to ease off home repossesions.

When I go back t my apartment tomorow I will look up the agreement.

All help apprceiated as I'm very worried.

IMO, i will keep up the payments.

Thanks

Old_Git

the Halifax will probably offer you a standard variable rate mortgage . They have no reason to go for repossesion . Your problem will be maybe getting anything better than a standard variable rate .

opinions4u

Call them on 08457 27 37 47.

Worst scenario is standard variable rate of 6.5%. In a falling interest rate environment this may go down further - no guarantees though.

This isn't that bad - to switch to something else might have a £999 fee and only knock a few quid off the payments.

msg2004

Thank you all.
I've been research and your ans appear to tie in.

However. I'd still like to hear from anyone in my boat & gone through the transition of neg equit, fixed term coming to an end

Thank you

wymondham

They will almost certainly just put you on the standard variable rate - costs a tad more for you, but you don't need to jump through any hoops!

MarkyMarkD

What's with all this "they'll put you on" or "they'll offer you" standard variable rate?

The terms of your fixed rate deal are that it's fixed for 2 years and then it automatically goes onto SVR. There's no "offering" involved. That's the deal you signed up to.

Whether, or not, Halifax will offer you a switch of products is an interesting question. Many lenders don't consider LTV, or conduct a revaluation, at the point of switching products. So Halifax may, if asked, offer you a choice of product switches regardless of your 100%+ LTV.

2 months before is the right sort of time to give them a call and ask them about products for existing borrowers. Don't mention your property's value or any concerns you have ... just tell them that your fixed rate is about to come to an end and you want to know what they are offering.

msg2004

Thanks all, will do.

road2ruin

I was in a very similar position to the OP last week. I had a fixed rate for 2yrs coming to an end with Alliance & Leicester. At the end of this period my repayments were going to shoot up by about £400pm.

Due to my property being worth now what it was 2yrs ago and my LTV being around 95% no other lender would touch me and I had no savings to try and get it under the 90% mark.

Anyway, I rang A&L and spoke to them about switching products. With no questions asked they put me on a 2yr tracker fixed at 1.39% above base rate which means my repayments are only £150pm higher and may fall next month if rates are cut.

But essentially, in answer to your question if your lot are anything like mine just pick the product you want and see what they say. Mine didn’t ask anything about my circumstances or what the value of the property is now.