Mortgage Money Help!

andyg

Hello, we currently have a fixed mortgage with Halifax at 5.3% on a fixed deal for 5years. it finishes at the end of April. so i'm in the process of looking at a new deal. like most, our house price has dropped recently.
So i have a mortgage of £182,000 over 35 years!! paying around £940 each month. the house is worth approx £170k-£180k.
i also have £30k worth of premium bonds which are making me sweet F.A. well on average £50 a month. (its a dinner our

can anybody offer any advice on what our best option is.
i'm married with a 3year old and a 6month old.

i like the security of a fixed mortgage, but i'm open to any suggestions.

many thanks in advance. been a subcriber of this website for many years, but never posted.

pixiepie99

As you are in negative equity you won't be able to get a new deal (it is highly unlikely anyway). Most likely you will be switched onto Halifax's SVR when your fixed rate ends but check the terms of your mortgage. The good thing is that the SVR is likely to be lower than your current rate and rates are unlikely to go up for a while (more likely to carry on going down for a bit yet).

The only way you'll be able to get a new decent fixed deal is if you have savings to plough into your mortgage to bring the LTV to about 80-85%. And with two little uns I'm guessing you don't!

brightbuy

If between £170k-£180k is really the value of your home, then you have no choice right now but to stay put, simply because you wont be able to remortgage with negative equity. You need to speak to an adviser about using your £30k savings to pay off a chunk of your mortgage.

Once you do this, you will be able to consider a remortgage.

skint_chick

Even if you used all of your £30k savings on a house value of £170k -or less depending on how cautious a surveyor would be - your loan to value is still just 90% so you won't get the best remortage deals available. So the only realistic option is staying with Halifax - their standard variable rate is 4% so your payments would reduce once your fix finishes.

You should maybe give them a call because depending on what their computerised valuation says you may be able to get a new fixed deal from them - when I sorted mine out last month they were allowing people new deals if their loan to value was under 120%!

If not then you could stay on the standard rate but keep paying your current payment so you are reducing your balance faster and the total amount of interest you'll pay over the term. You could even pay as much or as little of the £30k off the mortgage if you wanted to - although do you have other savings in case something happens work wise? Is your partner working or still on maternity leave? I know if it was me I would want to keep back some savings for my children's future (training/university etc) but it's a personal decision

Good luck!

feisty1

[quote=skint_chick;18529609]when I sorted mine out last month they were allowing people new deals if their loan to value was under 120%!
![/quote]



quote: new deals if their loan to value was under 120%!

where did you receive this information from?

dimbo61

The return on the premium bonds is pants so get rid.
Put some money into cash ISA,s and save into Halifax regular saver 5% in wifes name £500 a month.
Find out what deals halifax can offer you and what they value your home then use some of the money from the bonds to lower the LTV if it helps.
How safe is your JOB ? Dont have more than £16k in savings !!!
Pay lump sum off mortgage say £14-20k and this plus lowerv rate on new fixed rate deal might allow you to overpay a little each month.
Only my views but you need to protect your family and home
Think long term fix 5/10 years rates are very low right now GOOD LUCK

andyg

Many thanks for the help.
wife is not working at the moment, just finishing Maternity leave. but she has no job to go back to.
the only spare money we have is the £30k premium bonds. and our only debt is the mortgage. we have no credit card bills, or loans etc....
the Cash ISA looks interesting. from wanting to get away from Halifax it looks like we will be staying with them
i'll get the house valued, to give me an idea of what we can spare from the bonds. it will probably be all of it.

question: whatever the value of the house, is it best to put all the bond moeny onto the mortgage?
job wise, mine is ok but who knows these days.

cheers again.

feisty1

andyg Quote: "can anybody offer any advice on what our best option is."

Pls be aware it is neither financial or mortgage advice on here, postings are personal opinions

If you put the bonds into the mortgage, what do you have as an emergency fund.............

Debt_Free_Chick

Look at what the repayments would be if you stuck where you are, but went on to SVR.

My repayments (interest only) have halved since August, on SVR with IF, which is part of the Halifax/HBOS group.

nesssie1702

If your 5 year fixed is coming to an end in April, you can drop onto the SVR which should be a saving for you in terms of your monthly payments. Keep your payment level at the same rate as it is just now and you'll overpay on the mortgage. You'll also got your 30K to help over pay as well. Though it might be better to do this on a drip drip effect than paying off a lump sum.

Make sure you keep a reserve fund for emergencies.

dimbo61

You need to see the halifax as they may offer you a new deal and dont waste money having a valuation done as most lenders like to have there own done.
If its cheaper on the SVR then stay on that and overpay each month.
But for long term security I would still see what Halifax can offer you in the way of a long term fix of 3/5/7 years.
Only my views GOOD LUCK