End of fixed deal

Lesley72

Hi I may be worrying unecessarily and I suspect the doom and gloom in the press isn't helping ease my worries hence my post! I took out a 100% 2 year fixed rate repayment mortgage in Dec 07 so although it's a little way away I will be looking at what to do at the end of this period. Because the world was very different then, how will I stand when it comes to looking at this later in the year? Am I likely to be assessed way more harshly? My payments have been on time, I earn a good salary and have a decent credit rating so no issues there. All thoughts appreciated! Many thanks.

MrMicawber_2

You may not get a deal with other lenders at the moment simply because your LTV ratio will be very high.

Lesley72

So I could lose my house??? Surely the existing lender would be inclined to continue with the mortgage as it's been problem free?? Now I feel sick.

dimbo61

As savings rates are very poor at the moment could you overpay your mortgage for the next 10/11 months and have you got any savings which you could use at the end of your existing deal to lower your LTV.
Read the terms & conditions of your mortgage what does your mortgage revert to at the end of the fixed rate ? Who are you with ?
Does it go onto the SVR ( its now 3.5% with some lenders)
Does it go onto a tracker ? some are BOE ( 1.5% ) + 0.75% = 2.25% !!!
At the end of the day its a debt which you need to repay to clear your mortgage and OWN YOUR HOME

Lesley72

Sorry Dimbo not sure if I've misread your comment, I'm not suggesting I wouldn't pay my mortgage? I don't have any other debt so not sure what you're referring to, sorry if I've given the wrong impression somehow.

I will have a chat with the lender sooner rather than later and get some guidance from them on my specific arrangement.

Many thanks.

blueberrypie

Lesley72 wrote: »

So I could lose my house??? Surely the existing lender would be inclined to continue with the mortgage as it's been problem free?? Now I feel sick.

No, when your fixed-rate period ends, you'll go onto your lender's SVR (or maybe a tracker, depending on your mortgage deal). This is something that seems to confuse a lot of people - they think that when the fixed term ends, they *must* remortgage, but it doesn't mean that. It just means you can remortgage if you want to - either with another lender, or your current lender - or you can choose to simply continue on the SVR/tracker. In your situation, you're unlikely to have enough equity to qualify for a new deal, so you'll just continue with your current one.

Lesley72

Oh thanks so much blueberry, I was a first time buyer so this is all completely new to me. I feel better now and appreciate your reply.

dimbo61

Hi lesley I was not saying that you would or should not pay the mortgage
What I was saying was can you afford to overpay the mortgage by a little each month or do you have any savings which you can use at the end of your fixed rate deal to pay off some of the mortgage !
Read the terms and conditions of your mortgage offer which came with all the paperwork It will tell you what happens once your 2 year fix ends.
You took out a 100% mortgage and so have no equity in your home and with the housing market downturn you may be in negative equity !
This means you will more than likely have to go on whatever deal the lender has stated on the T & C.
If the mortgage states that the rate will revert to the lenders SVR ( which was say 6.5% in DECEMBER 2007 ) it will be the rate the lender has in DECEMBER 2009 ! which will I hope be less