New Build Valuation Lower than asking Price!

zappahey

fatpig wrote: »

Yes, when you move or when your fixed-rate deal ends.

Surely when your fixed rate deal ends you move to the lender's SVR.

natman

zappahey wrote: »

Surely when your fixed rate deal ends you move to the lender's SVR.

Hi, yes generally this is what happens, at present because of the interest rates being low etc the SVR is not too bad, however just asK a lot of Northern Rock customers who were lent 100% of mortgage...............

My friend had a 3.5% fixed and a mortgage for 140,000 paying around £710. His fix came to an end, he was in negative equity, so no new lender wanted to give him a new mortgage- he went on Northern Rock's SVR at the time he said it was 7.09%, his new monthly payments where - around £300 more, (£1010 monthly payment) unfortunatley he could not afford it, and now he is repossed.
I know the SVR are around 4.5%.
You can get some fixed at around 3.5%, but it is whats around the corner if you have a mortgage for 150k at 3.5% over 25 years = £758 a month
SVR - 150K AT 4.5% = £850 ISH

I know this is only rough, but if you cant then move your mortgae if you need to becasue of say negative equity and the SVR Becomes 5.5%, your into the £930 a month mark.

Going back to the start of the post - the valuation is critical here- it offers you clarity and information what you really need to make sound decisions. Dont end up with a weight around your neck, house buying is expensive enough already without paying for something that is not worth it.....................

lynzpower

natman wrote: »

Hi, yes generally this is what happens, at present because of the interest rates being low etc the SVR is not too bad, however just asK a lot of Northern Rock customers who were lent 100% of mortgage...............

My friend had a 3.5% fixed and a mortgage for 140,000 paying around £710. His fix came to an end, he was in negative equity, so no new lender wanted to give him a new mortgage- he went on Northern Rock's SVR at the time he said it was 7.09%, his new monthly payments where - around £300 more, (£1010 monthly payment) unfortunatley he could not afford it, and now he is repossed.
I know the SVR are around 4.5%.
You can get some fixed at around 3.5%, but it is whats around the corner if you have a mortgage for 150k at 3.5% over 25 years = £758 a month
SVR - 150K AT 4.5% = £850 ISH

I know this is only rough, but if you cant then move your mortgae if you need to becasue of say negative equity and the SVR Becomes 5.5%, your into the £930 a month mark.

Going back to the start of the post - the valuation is critical here- it offers you clarity and information what you really need to make sound decisions. Dont end up with a weight around your neck, house buying is expensive enough already without paying for something that is not worth it.....................

Its also worth mentioning to Johnathan that the interest rates at this time are the lowest they have ever been here in the UK.

Additioanlly it is worthwhile to note that 5% ( the average peak mortgage %) was deemed to be too high and that indeed, this scenario was happening far too fast, far too many repos, far too many people not being able to pay thier debts/ committments and more businesses and homes would have gone to the wall, in a tsunami, and the country could not sustain that.

If you think that interest rates are going to remain this low for more than 2 years, I fear you might get a shock. taxes have to be raised somewhere. Posters on here will remember 10% mortgage rates, and of course the problems that for many this had caused.

When you are on the SVR the control over what you pay monthly is not and cannot be controlled by you.

natman

When you are on the SVR the control over what you pay monthly is not and cannot be controlled by you.[/QUOTE]

Lynzpower, I think we have made a fab double act on this post. I think we both want jonathan to really hang fire and assess his situation. What seems ok today can be a mess tomorrow, where in jonathans case, what seems like a dodgey decision today, could end up ........................well who knows.

Thanks Lynz

PasturesNew

lynzpower wrote: »

If anyone is any good at maths, they could tell us what an extra 20k on the mortgage over 25 years would actually cost..... even at 5%

ONe for pastures new, shes good at this mathsy stuff

You would spend £35075.40 extra
£15075.40 will go towards INTEREST
£20000.00 will go towards PRINCIPAL

JanCee

There are 2 flats in my town coming up for auction with a guide price of £45k - £50k. They were originally sold from new in 2006 at £205k & £179k.

I would even query whether the Nationwide valuer is being cautious enough rather than over cautious. This sector of the property market is going to bear the brunt of the price drops.

Negotiate now while you have the chance.

superfran_uk

I can't believe ANYONE would pay 175 for a flat in Crawley, especially a newbuild. You could get a semi for that...

Trollfever

OP would benefit from browsing the bankruptcy board on this site.



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molerat

lynzpower wrote: »

Posters on here will remember 10% mortgage rates, and of course the problems that for many this had caused.

I remember dreaming about mortgage rates being as low as 10% whilst paying 15%.;)

furndire

molerat wrote: »

I remember dreaming about mortgage rates being as low as 10% whilst paying 15%.;)

I remember 17% at one time !!!!!!! Now that was scary!!!!! Luckily mortgage was for 22,000 - interest only - the days when endowment mortgages really did pay off your mortgage and money to spare.