Fixed Rate Mortgage Worries

Seagull269

Myself and my husband are first time buyers, who are quite young and very new to this stuff. We have a few worries and circumstaances which we feel could make things very difficult:

We have a 97% LTV-What happens if we cannot find another fixed mortgage for a 97% rate? Do we have to find the extra 2% and be put onto a 95% LTV or because we are already on a 97% they cannot change it?

We live in Shared Ownership Property-We found Halifax was the only company that would do this and the 97% LTV.

With the economic situation we fear that they are just going to demand more money at re mortgage time later on this year because we are on 97% LTV and their website is showing a top LTV of 95%.

Please help!!!!!

beecher

If your LTV is higher than 95% you'll be put on the Standard Variable Rate which is 4.5% at the moment. Most other lenders need an LTV of 90% so remortgaging will probably be out of the question, particularly as your LTV will be higher than it was when you bought.

The SVR isn't a bad place to be at the moment, but be aware it will start to go up at some point in the future. I'd start saving and overpaying.

herbiesjp

Are you already with Halifax?

If so a broker should be able to help you very quickly with a new Halifax deal

Seagull269

We are with the Halifax. We are just seeing how all this is going to affect us when it comes to re fixing our mortgage when the fixed rate expires in November. We feel we need to be on a fixed rate as we need to know what we are payng each month, as we cannot afford to have such a variation of paymentsI'd rather pay a bit more on a fixed rate at the moment then be on a low rate and then for that low rate to go above what I am currently paying on a fixed rate. With the income we have we cannot afford to take such a high risk, such as a variable rate mortgage.

beecher

Seagull269 wrote: »

We are with the Halifax. We are just seeing how all this is going to affect us when it comes to re fixing our mortgage when the fixed rate expires in November. We feel we need to be on a fixed rate as we need to know what we are payng each month, as we cannot afford to have such a variation of paymentsI'd rather pay a bit more on a fixed rate at the moment then be on a low rate and then for that low rate to go above what I am currently paying on a fixed rate. With the income we have we cannot afford to take such a high risk, such as a variable rate mortgage.

Halifax won't let you reserve a product until 3 months before your expires so you could phone them around the end of August. Other lenders will let you reserve a product earlier but many will need 90% LTV as I said. Your LTV might well be even higher by November.

You probably need to see an adviser to work out your options.

spuds_2

Cheapest fixed rate for 3 years with 95% LTV at the Halifax is 4.84 as far as I can see, which is probably less than you are on now. The site has a calculator to work out what repayments will be. Hopefully something similar or maybe better will be on offer by August.

http://www.halifax.co.uk/mortgages/existingcustomer_5yrfixed.asp

I think you will struggle to transfer to another lender with 95% LTV. Remember these remortgages have fees attached too so you need to budget for that.

herbiesjp

Get in contact with Halifax (or a whole of market adviser) 3 months before your Halifax deal finishes.

It's likely your only option will be Halifax, and so talking to either, they shoulkd come back with the best options Halifax can offer - brokes do sometimes get exclusives on the product transfer deasl which you would need to look at

Seagull269

As I am on a 97% LTV will they have to offer me a like for like of 97% because I am already on that or will I have to find 2% of my mortgage to drop me down to a 95% because that is all anyone is offering?

herbiesjp

No - you will be eligible for a 95% deal currently

Seagull269

If I am currently eligible for a 95% and I am currently on a 97% will that mean I have to find 2% or should my 2 years (by then) of paying should have covered the difference of 2% in LTV rate?

herbiesjp

Irrespective of what your LTV is they will currently offer you a 95% deal.

No you would not have to find the extra 2%