LVR & re-mortgaging - really worried

poonum

Went to see mortgage advisor at Nationwide today as our fixed rate ends at the end of Feb. She told me that our only option is to go onto the SVR as our LVR is too high for them to offer us any other product. I was so shocked - we bought our house for £253k 18 months ago and have a total mortgage of £190k, so at that point had about £63k equity. Mortgage advisor looked up on her computer what our house would now currently be worth and it came out at £210k - I said that there are exactly the same houses in my road currently on the market, and recently sold, for £230-£250k, but she said she had to go by the average price the computer gave! Is this right? There are no houses round her selling / sold for £210k, it's a really nice area and prices don't seem to have dropped as much as in other areas. I don't know what to do - could I get an estate agent to value the property and use that as evidence??

I know that at the moment Nationwide's SVR is good and indeed our monthly payments will be £100 cheaper on that (we plan to overpay). But I'm very worried about what will happen when rates start to rise and we are stuck on the SVR unable to get another product because our LVR is too high. She said it is currently 90% based on the house being worth what her computer said, and Nationwide won't go above an 85% LVR - are all other lenders the same?

Would appreciate some advice as I don't know what to do. It's not going into negative equity that worries me as we plan to stay here long term as a family home - it's not being able to get another mortgage when rates start to go up again. She basically said we'd just have to sell our home when that happens!

poonum

I forgot to say - we only need to re-mortgage £140k for the time being - the other £50k is on a fixed also with NW for another 4 years.

payless

There are some lenders at 90% but fixed rates higher than NW SVR
( of coursde if really worth more...)

BUT
you have to move all or nothing ( a few rare exceptions, but unlikely to be available here)

Nw current fixed rates over 75% aren't pretty anyways

downs523

britannia bs do 90% ltv at 5.69% 5 yr fixed

Squish_21

No useful advice im afraid. Just wanted to say I am in the same situation as you. Fixed rate ending, cant get another mortgage so going onto SVR.

V.worried about the rates going back up as they obviously will at some point but cant see a way out.

luckyfool

Nationwide SVR at 3.5% is better than 99.9% of new products on the market anyway so its no great hardship in the short term allowing it to revert onto this deal.

JillJ72

We're in exactly the same position, with exactly the same concerns. No words of advice really. Hold tight, rein in, hope interest rates stay lower and house prices start to rise. Chin up and all that.

Jill

Joe_Bloggs

@poonum
You may have the the best of both worlds. You have a proportion of your mortgage at a fixed rate and the rest that tracks the Bank of England base rate by a maximum of 2%. Many existing Nationwide customers would do anything to get that SVR (BMR) rate. So many require the security of a fixed rate even if it costs more.

It is unfortunate that house sales are so low as to make house price statistics a bit of a lottery. The Nationwide are traditionally, pessimistic/conservative/cautious, in my view.
It may make more sense to overpay the part of mortgage with the highest interst rate first.
J_B (Nationwide mortgage holder. Tracking @2.24% )

Pinky15

Do you know I am so cross had this situation today. We want to borrow an additional 12000 on our mortgage. This is too do a kitchen extension and utility which in time will add value. Our house is worth around 125000. Houses in the next terrace are selling for this they are 3 bed and ours is 4 bed. At the mo we owe 63000 on our mortgage which means if we sold at that price we would have 63000 equity. We also overpay maximum 20% per month. I phoned up and was told yes we can have the money they could do a tracker rate at 3.55% great yes we will have this. No wait she said because of the amount we are borrowing we will have to go on the 4.5% tracker. After going throught the application process the lady spoke to the valuations team who told her our house was worth 92000!!! I don;t think so houses are selling still around here!! So she then said this take us over our LTV limit and our only options now were 2 and 5 year fixed rates at 6.9% and with £999 fees we have to pay upfront. I am fuming now!!! Its has gone from 3% up to nearly 7% and they want £999. we thought it would be cheaper to stay put and extend rather than move - but really don't know what to do!!!!!

clairehi

Hi Pinky,

why not stay put and get an unsecured loan for the extension instead? depending on your credit rating, you should be able to borrow 12K unsecured. although interest rates are higher, if you pay it off over a shorter term, maybe diverting part of your mortgage overpayment money into this, the total interest paid over the term may be quite similar to putting it on the mortgage.

this is what I am looking to do, as we are shortly coming off an A&L fixed rate onto a lifetime tracker and need to raise funds for home improvements. A&Ls rates for further advances are pants but there is no way I am moving away from this sweet deal right now!

Joe_Bloggs

@pinky15
Can you find out how much they can lend you without them going crazy ? You could divert your overpayments to save up for this amount.
The trouble with home improvements is that you are investing in a depreciating asset in these times. The banks are in a very difficult situation as they have a great stake in the property market. If they make lending conditions worse then their mortgage assets fall in value. If they lend unwisely then their reputation as a bank is tarnished.
J_B.