Nationwide tracker coming to an end - Options

spdavies

Hey folks.

I have a £135k tracker against a House bought in July 2007 (valued at £190k) coming to an end in Sept and would like to pick the brains of you knowledgeable folk.

(I do intend to see a broker but want to get a feel first).

Q1. In terms of % LTV is this taken against original purchase price or will they re-value the house at current value? I'm obviously worried that whilst i had a nice healthy deposit originally it will not look so great now with the reduction in house price

Q2. My tracker is obvously working a treat for me at the moment and will switch to a variable in Sept. Variables make me nervous but clearly there may be some benefits if the interest rates stay so low. Do you think i should let it switch to variable and monitor before changing tactics and moving to a fixed which is my long term goal or take the hit and switch now whilst there are some good fixed rates about.

Q3. When is the optimal time to start looking for a new deal (i.e. should i start looking now or should i wait until nearer to Sept)?

All opinions welcome.

Thanks.

beecher

1. They will revalue your property and use the current value.

2. I don't think it'd be worthwhile changing now as you would have to pay an Early Repayment Charge - you could do the sums and see if you think it is worht it

3. It is too early to look right now - some lenders might speak to you 6 months before but mostly 3 months before is probably the right time.

bluegrover

On the nationwide website you can enter your location and property price for a particular quarter and they work out the value now based on their house price index. That will give you a fair value of what prices have come down by.
http://www.nationwide.co.uk/hpi/?source=nationwide&campaign=homepage&execution=hpi_lhs_01122008

You should expect to see 10-15% .

At the moment, just stay on their BMR product which is 3%. To get a decent mortgage, you need to try to get to the magical 75% LTV, but I doubt many people have that kind of cash lying around!

spdavies

Thanks for the input folks.

I've been on the nationwide site and it gives me approx 14% reduction to 160k (ouch).

That leaves me with an LTV of approx 85% which is annoying but i guess it'll only get worse in the next few months.

Sounds like i should wait a couple of months before re-considering. The only question then really is whether i should leave it at the variable rate and if so when is the appropriate point to switch to fixed (i.e. as soon as the rate starts rising again???)

JimBoB_5

It's still worth contacting Nationwide direct, you never know they might not reduce the value of your house quite so much.