up poop creek with no paddle

joisey

hello guys, *** long post ***

my first post so please be gentle. I think I am royally in the do do big time.

Aug 2006, we paid £90k for our house, back in the days where banks were laughing it up and lending people loads of money. We lumped our solicitors fees in with our mortage (yes I know, looking back, big mistake) but we wanted to get a foot on the ladder and didnt see the point in renting anymore. We also got stung for a higher lending charge as well as we were borrowing 100%. so our total mortgage was just over the £93k mark.

we decided to go for a fixed rate deal for 3 years, and our monthly repayments have been £525 a month.

It is now coming to the end of our fixed rate deal, we are with RBS and their current standard mortgage rate is currently 4%.
it means our monthly repayments will go down to about £424 they said.

we now owe around £92240 (I feel sick thinking about it) and our house was last valued when we bought it in 2006 at 90k

I called rbs today and spoke to a right (insert name of animal that eats grass and produces milk) who basically said that if I wanted a new deal then she would have to email someone to see if I could have it, it would be above 5% either on a 3 or 5 year fixed deal. The she told me their would be an arrangement fee of £199 and if the person who she was emailing said no then I would have to pay for their valuation at £215.

I called my bank and a few other lenders and no one will touch us barge pole as our ltv is quite high. I used zoopla to check the value of my house and its not looking good at all £84k

options

1. when rate goes down to 4% over pay by £100 a month (I can to try and bring our ltv down) and prayer that the rates dont start shooting up.
2. when rates go down to 4% save the £100 a month as a cushion in case mortgage rates go up so we have a pot to dip into

if the mortgage rate goes above 6.5% then we wont be able to afford anymore. I wasn't completly niave when we bought our house, but I foolishly thought I would be able to get a new mortgage quite easily once the 3 years was up, I was hoping to go to egg and offset or a one account of some kind (there ltv is currently 75%)

short of robbing a bank I am stumped _pale_

dimbo61

Wait and see what the nice lady can come up with!
Overpay by at least the £100 a month you will be saving if you do go onto the 4%SVR and start to overpay on top of that.
Cancel the SKY/GYM and stop going out
take sandwiches to work, get a second job and do everything you can to stop you losing your home.
First bill mortgage
second bill council tax
third bill all the other bills gas/elec/water
money left ( what you live on)

joisey

we already cut back quite a lot, so guess will just have to cut back further...

just wish we could get a new deal...

does anyone have any idea how long were looking at before interest rates start rising?

will take speculation, informed opinion or best guess!!!

dimbo61

See what RBS can offer you !
some 5.99/6.49% deals on there website with 90%LTV!
you are an existing customer so hope they can sort you out.
£92,000 at 5.99% over 22 years is £628 a month
also allowed to overpay by 10% on top.

joisey

rbs never got back to me, think I will give it a few days before calling them again, fingers crossed I wont get to speak to the moo moo!!!

I know we can over pay by 10%, tbh we cant afford £628 at the minute!!!

Rikki

joisey wrote: »

we already cut back quite a lot, so guess will just have to cut back further...

just wish we could get a new deal...

does anyone have any idea how long were looking at before interest rates start rising?

will take speculation, informed opinion or best guess!!!

Personally I would just go onto their svr rate and over pay. This would put you in a better position for fixing at a better rate later on.

Why opt for mortgage rat of 5.99% or 6.45% when you can pay 4%?

Why fix at a high rate now when you can make extra payments you can afford. See it as a tracker type mortgage and go with the flow for a while.


EDIT: Another way to think of it is.

You will pay the mortgage off in the same term agreed whatever interest rate you pay.
If you pay the svr at 4% and make overpayments you will be reducing the capital you owe quicker.
Increase the equity you have leaving you in a better position to get a fixed deal at a later date.

real1314

Overpaying by £100 a month won't have much effect at all on your LTV. And will not have much impact on your mortgage payments.

2 years of overpaying might bring the mortgage down to £88k, but that's still above 95% LTV based on the value you say it had when purchased and is £4k above what you *think* the value might be.

I'd suggest that saving the money in case of increased rates might be a better option, 2 years of this would see £2400 stashed away.
Getting used to putting the £100 away would mean that an increase in your mortgage could be met readily up to £525 by stopping the saving, and if rates went up to push it to £625 a month, you could use the saved money to top up your payments. But it's just what I *think* and isn't based on any financial calculations or experience.

dimbo61

Agree with Rikki if you cant get another deal at a good rate with RBS then you have no choice but to go onto the SVR and if you can overpay by every penny you can.
If you did get a 5.99% fixed rate deal you would have to come up with £628 a month so overpaying the SVR by £200 would clear £2400 extra plus saved interest each year.
GOOD LUCK

joisey

thanks guys and girls
will jut have to plod on..