Re-mortgage

hillan69

After reading the L&C re-mortgage guide, I became a bit worried. We have a tracker rate mortgage deal until November -09 which have obviously been great lately due to the low interest rate. As I was reading the guide and saw the information about how much equity you'll need to be able to get a decent new deal, I became even more worried. The value of the property then (5yrs ago) was £140 000 and we now owe £130 00 on our mortgage. I think the current value of the property is in the region of £140 000 - £145 00 but is of course not perfectly sure. We tried a couple of months back to get a mortgage holiday from the bank, which was declined, because they said the property's current value was £135 000. ( I reckon they go on some national figures) Shall I pay for an independent valuation to make sure I get the best market value for my property? Also, what can I expect if the new mortgage means that I have to borrow between 75%-90% ?? I feel very cheated in the fact that we probably then have to pay even more than we did initially. We have never missed one payment and have got excellent credit ratings. It would me extremely appreciated if someone could give me some hints.
Many thanks and all the best,
Hillan69

Mini_Bear

Hi OP, have you been overpaying your mortgage whilst on this low rate tracker? - if you have it may have lowered your LTV, if not then where has the extra mortgage money been spent? can you sell it (ie cars - and put the cash back into the house?)

beecher

Overpay like crazy from now til November - the value of your property will have gone down, like every other property in the country. £135,000 may not be far off, in which case you'd have to get the amount outstanding down to £120,000 or so to get a deal elsewhere.

You'll go onto the SVR if your LTV is high - or if you're lucky your present lender may give you a deal.

the fact that you needed a mortgage holiday while on a low tracker is worrying - I'd advice going onto the Debt Free Wannabee forums for help in cutting back expenditure on areas you can in order to be prepared for the hike in payments you'll see at the end of the year. Good thing is that you've got 7 months to prepare.

hillan69

thanks for your prompt advice,
I suppose we could put more money into our mortgage to decrease it's LTV, it is just tight all over the place at the moment. To get to the £120 000 would not be possible, but I suppose to make overpayments seems like a good idea. Hopefully we could get a few grand sunk into it. The fact of a higher monthly payment is not great, but we would manage. After all the cuts in interest rates, we have actually been paying about £300 less/month since sometime in the summer. ( currently with Halifax) I was also checking property prices in our area (Manchester City Centre) and the prices are absolutely mad...(cheap) We know that we going to stay put, which isn't a problem. Hopefully the market recovers soon.
Again, thanks
Hillan69

beecher

Since you're with the Halifax, you're probably best to stick with them as - at least at present - they're allowing people to take on new deals even if they're in negative equity (as long as LTV isn't above 120%). You'd be able to go onto the 90 - 95 rates here
http://www.halifax.co.uk/mortgages/existing-customer-fixed-95ltv.asp

which are 5.19% with £1249 fees at the moment.

My own advice would be to work out what you'd be paying at that rate, and start overpaying the difference between what you're paying now, and what you'll be paying if rates are the same by November.

Obviously you also have the option of remaining on the SVR in November, but rates may be beginning to rise by then.

Good luck