Need some advice on what to do.

loopyloopy_2

We currently have a fixed mortgage with GE money at 6.99% monthly payment £709.84 current balance 96,659.

and a seperate secured loan at 11.75% monthly payment about £130 balance remaining 13137.22.

I have received a letter from my original broker as outr fixed ends on 9th Feb.

I have spoken with ge money and they have said our mortgage will go to 2.64 above the barclays baserate so if it was today would cost us 4.64% £584 a month.

Both me and my partner have adverse credit, no ccjs but have been on a dmp with payplan for over a year with outstanding debts of 17,000.

We have no mortgage or secure loan arrears although in the last 3 years we have been late with payment max 2 weeks. about 3-4 times.

Not sure what to do? should I start looking for another fixed or just not bother as my monthly payments in feb are going to be about £120 less a month anyway!!

If the rates increase we know we can afford to pay up to 6.99% as we have been the last 3 years so could kind of cope with the base rate going to 4% but no higher, whats the chances of a 2% rise in the next 6-12 months!!

Just so confused and with such a crap credit score im not even sure if we could get another mortgage.

I would say our home is worth £150000, My neighbours went for £145,000 a couple of weeks ago and looks a mess, whilst ours has had new everything within the last 2 years incl conservatory.

any help would be great.

Joe_Bloggs

I would say without considering any of your financial details. You should do nothing. Learn some budgeting skills or pass on your experiences. Improve your credit rating by making sensible decisions. Your finances should become your area of expertise.
J_B.

opinions4u

4.64% seems a decent deal for your cicumstances. That's less than the Halifax SVR!! Keep your credit clean and you'll soon be mainstream!!

What I would STRONGLY recommend is that the reduction in payments you are about to benefit from is saved and not spent (don't tell Gordon Brown this).

This will give you a couple of things:

(1) The ability to afford higher payments if rates do rise again.
(2) Prove that you have the discipline to save
(3) A lump sum at some point which you can use to repay or reduce some of your debt - ideally the secured loan (but check if it allows overpayments before doing this) - by reducing your outstanding debt further you'll benefit from lower payments as and when interest rates do rise again in future).

Good luck!

JimmyTheWig

Agree with Jow_Bloggs.
With your credit history (though, as you say, not as bad as it could be it is pretty poor) you are unlikely to get the best mortgage deals. The credit crunch is blamed for a lot of things, but the one thing it really does mean is that banks have less money to lend out than they did before. The effect of this is that they can pick and choose who they want to lend to.
So if you're not going to get the best deals then you will probably be looking at a reasonably high interest rate with a high arrangement fee. I can't see this helping you at all.

What I would say is if your monthly repayments are coming down then think about what you want to do with this extra cash each month. You could just spend it. But you don't need to, as you haven't had it up until now. So a better thing to do would be to clear outstanding debts. Start with the ones with the highest APR interest rates. Paying these debts off sooner rather than later will save you serious money over the coming years.

(Cross posted with opinions4u, who said similar things to me...)