Any advice here will be good please

staceydaisy

Hi all

I keep wondering if it is worth me pulling out of my fixed deal rate i am now paying 6.94% and this is fixed till july 2010. what do you reckon to me pulling out i will be charged 2% my current mortgage is for 99000. i dnt know if i will be recharged a higher lending charge as now in negative equity what do you guys/gals reckon please

Desperate_Housewife_2-2

I'm no expert but you need to sit down and work out the numbers. My quick calc is 2% of £99000 is £1980. Your monthly interest on mortgage is £572.55 not including capital repayments times that by 18 months to take you up to July 2010 is £10305.90 in interest payments alone. If you moved to a rate of say 3.9% (thats what I'm on) it would be £3861 saving you £4464.90 after you've taken off the fee.

Check the numbers and read your T&C and even check with IFA before you go. Good luck

pixiepie99

You will not be able to remortgage if you are in negative equity.

dimbo61

If you are in negative equity then you will have to stick with your existing lender.
Read the terms and conditions of your mortgage offer and what happens after the fixed rate ends ( does it go onto the lenders SVR or some kind of tracker deal )
If you can overpay any spare money to try and reduce your debt ( its your home not just an investment !!)
If you had £2000 spare then overpay not waste it on fees.
GOOD LUCK

Dithering_Dad

Even without negative equity you'd be looking at a £2k redemption charge and then you'd also have to have a new arrangement fee and possibly a mortgage valuation charge on your new mortgage.

While it must rankle that you're paying on such a high rate, I guess you made the choice to go on a fixed rate for mortgage stability and I'm afraid you're stuck with it.

I would do as dimbo61 has suggested and put the £2k redemption fee you would have had to pay (if you have it) onto the mortgage and then do everything you can to blitz the mortgage from now until the end of your current deal in 2010. You will then hopefully be out of Neg Equity and will be able to negotiate a decent remortgage deal.

The DFW board is a great place to start to get advice on reducing your outgoings and even an extra £1 overpaid on your mortgage can make a huge difference over time.

I know £99,000 is a daunting figure to tackle, so try and break it down into pieces and aim to pay off the pieces one at a time. If I were you I'd find out how much Negative Equity I was in and make getting rid of that my number one target (i.e. if your house is in Neg Equ. to the tune of £10k, then I'd try and overpay £10k before 2010).

I have done the same with my mortgage which was originally £150k. I had a £38k interest only bit that was supposed to be covered by an endowment (:rolleyes:). I made this part of my mortgage my top priority and after a year of effort I finally cleared it. No more worries about Endowment shortfalls for me

Good luck with paying down your mortgage and getting a better deal next time.