5K short for 75% remortgage

FK1869

I'm 5K short to qualify for a 75% LTV remortgage. I have about 2.5k debt on credit card that I was planning to pay off in a short period (5 months) but now I'm thinking about trying to save the required 5K asap to remortgage at the current v good fixed rates (e.g. 4.15% 5 yr fixed from the post office). If I pay off the cards then save the 5k I'm worried the rates would have risen again so no good deals available. When do ppl think the rates will rise & at what speed? My current mortgage is in two parts, 84k @ bmr (2.5%) & 43k fixed @ 5.85% until jan 2011. I was thinking bout paying erc on the fixed to bring both mortgages together at an attractive rate (4.15%) for a longish period (5 yr). Any advice?

beecher

I'd be more concerned by the fact that by the time you save 5k, the value of your house might have dropped further. Also, who has told you that you're 5k short - are you sure the post office would value the property at the same rate you have in your head?

How much are your ERCs? When you add that plus the fees are you sure you['re going to be saving much money over the term?

FK1869

think i'm 5k short due to nationwide (my current lender) website. house prices valued at 167k, which means 75% = 123k. erc is £900. have since thought about the overall cost of adding erc too. might just pay off cards & save as much as possible while watching the deals closely to take the best deal we can afford at the time

thanks

Joe_Bloggs

@FK1869
Post the interest rates on your credit card/cards so that the relative rates can be compared. In general, pay off the debts that come with the highest rate, interest first.
J_B.
(Overpayment / early payment charges may be applicable to mortgages/loans. Find out / research the terms and conditions as they apply to you. )

cocktail

FK1869 wrote: »

think i'm 5k short due to nationwide (my current lender) website. house prices valued at 167k, which means 75% = 123k. erc is £900. have since thought about the overall cost of adding erc too. might just pay off cards & save as much as possible while watching the deals closely to take the best deal we can afford at the time

thanks[/quote
good thinking.
though the nationwide website gives u an indication of the current value, it is not accurate and the shortfall maybe bigger than you think.
u might be better off paying the credit cards as it is likely they are on the higher APR.

FK1869

both are still 0% (one has £600, one £1900) but can't recall how long for. i also have a 10k loan that has 4 yrs to run at £230 p/m. want to get rid of that too asap - erc on that is two months interest. so.....pay off cards, save to pay off loan, then change mortgage? all that regardless of mortgage rates etc?

beecher

FK1869 wrote: »

both are still 0% (one has £600, one £1900) but can't recall how long for. i also have a 10k loan that has 4 yrs to run at £230 p/m. want to get rid of that too asap - erc on that is two months interest. so.....pay off cards, save to pay off loan, then change mortgage? all that regardless of mortgage rates etc?

You may have to overpay your mortgage too in order to remortgage, but yes I'd agree that getting rid of your debts first makes sense.

michaels

I disagree - if you need to pay 10% on a 5k loan to let you cut your mortgage rate on the entire mortgage by 1% for 5 years it has got to be worth it.

I also suspect that if your income multiple is OK then the additional borrowing won't stop you getting the mortgage (although the loan will count at a lower income multiple than the equivalent mortgage amount)

Take the deal now, in the time you take to save the 5% it is likely your house may have fallen in value such that you no longer have the 25% equity if that makes sense...

FK1869

I'd like to take the deal now but will they let me? Can only ask I suppose

Joe_Bloggs

@FK1869
Research how long that 0% lasts for. The interest rates on many credit cards has shot up!
I was a slow stoozer. I have given this up since February when my 0% on purchases ran out from Halifax.

My mortgage is with Nationwide. I have found them to be very cautious with their lending. This is why I have paid off all credit card debt . Their BMR (SVR in their terminology) is Bank of England Base + 2%. This will suit me when I leave my collared 'tracker' of 2.24% next year.
J_B
In a strange way this tracker acts like a fixed. As the BofE messes with a near meaningless interest rates the Nationwide enforces a collar with a 0.5% concession to their original terms, as they apply them to me.