Help remortgaging question Year 2011

ali137

Hi

I am currently still on a fixed rate interest only mortgage with Birmingham Midshare for another 2 years(5.59%:mad::mad:) My current outstatnding balance is £226,000

When I come to remortgage with another company, do i have to pay a deposit (e.g 10%,15%) on the outstanding mortatge of £226,000.

_Andy_

No, the new company will look at the 'equity' in your home which is the difference between the value and what you owe.
So if you had a house worth £100,000 and owed £90,000, the equity would be £10,000.

The more equity the better.

You'll also see this referred to as 'LTV' (loan to value) which is what you owe as a percentage of the house value.
E.g. in my example above the LTV would be 90%.
The lower the LTV the better.

ali137

Thanks for your reply _Andy_

My house was bought for £248,000 in April 2008 and i paid a deposit of 10% £24,800 + over £3000 arrangement fee.

Now one of my neighbours has listed their house in the current climate for £220,000 on right move:mad::mad::mad:

So i am panicking right now as to how i will afford to remortgage in 2011

beecher

If your LTV is below 90% you'll go on your lender's SVR and won't be able to remortgage. Who knows where we'll be in 2011 - try to overpay or save as much as you can in the next 2 years to build your equity back up again.

ali137

Thank for the reply beecher

I need to stay positive, well that is what my Mrs is saying. no more looking at house prices or right move for me. If i do i get depressed thinking about it.

Positive thoughts. 2011 is 2 years away

asandwhen

You dont need to remortgage - You will simply revert to the lenders SVR currently 4.84% - There is no need to panic - Back in the day you took out a mortgage and stayed with the same lender till it finished - it is only recently that people have started to move every few years.

ali137

asandwhen wrote: »

You dont need to remortgage - You will simply revert to the lenders SVR currently 4.84% -

Hopefully that rate stays in 2011.