Mortgage Offer up - Where to start???

loopyloulou_3

My mortgage offer is up at the end of July this year.

I basically have about £174000 o/s and at the moment have a fixed rate interest only (5.75% - i think) with GMAC (who I have a hatred for! But had to go with them as my ex had lots of debt and I then took over the mortgage 18 months ago with my sister when ex moved out). I have no idea what my house is worth, but am seriously worried i could be in neg equity. I had to keep the house because the redemption was SO high and neither me or my ex could afford to sell.

I can easily afford the mortgage at present (896 a month) and my sister does not contribute at all (she is just on the mortgage as it is the only way i could keep the house - she is living in a house my parents own). I have a lodger too - which helps - and am managing very well paying in on my own.

Ideally I would like to get my mortgage with a better mortgage company, I just don't know if this would be possible, or where to begin. Am I best to ask GMAC what deals they would offer me if I were to stay with them? And then look at other lenders in the meantime?

Any advice would be greatly appreciated

Loopy x

beecher

To move lender you would need to have an LTV of at least 90% so your house would have to be valued at around £194000. If you think that is unrealistic, then you're stuck with what GMAC can offer you until you can overpay enough to move. Have you checked what rate you go onto once your fix finishes?

loopyloulou_3

Just got a letter from GMAC saying as from July my mortgage will go DOWN to 2.6% £396 a month (I need to read the letter in more detail tho) will check the finer details 2nite.....

happybroker

great news!!

loopyloulou_3

just worried that the rates will start going up and then i will be in trouble!! will defo over pay for a while and then reconsider fixing again :-) so for the short term HAPPY DAYS!!

loopyloulou_3

i was convinced it was going to go up for some reason (didnt even think about the possibility that it would in fact go DOWN!!)

System

loopyloulou wrote: »

i was convinced it was going to go up for some reason (didnt even think about the possibility that it would in fact go DOWN!!)

:beer: Just make sure you don't spend ALL that extra cash and try and get yourself out of negative equity with it instead while you still can.

dimbo61

You have managed to pay a mortgage of £896 for the last 18 months so overpay the £500 a month you will be saving each month from july.
You could spilt the £500 a month and overpay half and pay £250 a month into a barclays 6% regular saver.
If you are used to paying out £896 a month then you will not notice if rates do start to rise because you can reduce your overpayment.
GOOD LUCK

Rafter

Fortunately you seem to be on a tracker reversion rate rather than GMACs Standard Variable rate.

However, you payment could shoot up if the bank of england raise rates.

Priority should be saving as much as possible to get yourself some equity so that you can remortgage or fix in the future.

Otherwise you aren't in control.

Good luck

R.

loopyloulou_3

I am defo going to use the money I will be saving to pay off some of the capital, would it be better to overpay or put in savings account though?