103% LTV - fix rate offered by current provider - should I do it???

tabc_2

Hi All

Grim news that my mortage is at 103% LTV. A+L are my provider and I am currently on their SVR.

Would I be offered a remortage anywhere else with that LTV? Do you think 1.5 year at 5.49% or a 2.5 year at 5.99% is a reasonable offer?

Any advice wouldbe very greatly appreciated

Thank you

unite79

No one else wil touch you - If you need payment security the 2.5 year deal is ok - What rate do A+L move you onto, there SVR is not very attractive!

W

Thrugelmir

tabc wrote: »

Hi All

Grim news that my mortage is at 103% LTV. A+L are my provider and I am currently on their SVR.

Would I be offered a remortage anywhere else with that LTV? Do you think 1.5 year at 5.49% or a 2.5 year at 5.99% is a reasonable offer?

Any advice wouldbe very greatly appreciated

Thank you

Welcome.

As you are in negative equity the chances of finding another mortgage with as good rates are very low.

Are there fees attached to the fixed rate A+L offer?
What's their SVR?

If you can afford higher repayments than you currently do on the SVR. You may wish to consider paying down as much capital as possible. Rather than fixing on a higher rate of interest. In the longer term even if rates rise at least you'll be paying interest on less capital.

A 1.5 year term isnt very long. Although interest rates are expected to rise in 2010. This doesn't appear an attractive option at the moment.

Very much a personal choice. Recent rises in fixed rates don't make them attractive on short term fixes.

beecher

How much would you have to repay to get your LTV down to 90%? Realistically that's what you need to move elsewhere. You need to have a plan to deal with payments rising when the rates do rise so overpay as much as possible to prepare. You can go onto the Debt Free Wannabee forums for help with this, but Sky/holidays/gym membership probably need to go.

tabc_2

There aren't any fees to fix. Their SVR is 4.99. So the payment difference isn't that high. They're not attractive rates though but if there is a chance the svr is going to rise, well supposed better to be safe for next 2 years than sorry.

103% LTV!!! Still can't believe it! Totally bought at the peak of the peak!

Thrugelmir

tabc wrote: »

There aren't any fees to fix. Their SVR is 4.99. So the payment difference isn't that high. They're not attractive rates though but if there is a chance the svr is going to rise, well supposed better to be safe for next 2 years than sorry.

103% LTV!!! Still can't believe it! Totally bought at the peak of the peak!

Take the longer fix and use the time to get to grips with your finances.

purply

OP,
I am in exactly the same boat as you but 114% LTV!!!:eek:
I too am with A&L and have been offered the 1.5 years @ 5.49% or the 2 years @ 5.99%

I decided to go for the 1.5 years but still have a week to cancel if I wish to do so.

I'm on maternity leave at the mo, so the option to overpay is limited but once I get back to work, my priority is to make overpayments (which you can only do in Jan once a year in Jan.

Getting our mortgage to 90% LTV is gonna be hard.

riles

It may be worth considering that A&L is merging wholesale with Abbey over the coming months. Abbey have an SVR at 4.24%. Is there a chance that the A&L SVR will drop to match that? Who knows, it could of course go the other way.I'm in the same position with negative equity and an A&L mortgage on SVR. With no fee involved, I'm inclined to believe that A&L don't think that their SVR is going to rise above those levels quoted over that period, so I'm staying put and using the saving by paying 4.99% to shift a small amount of capital. Hope I turn out to be right!

Mrs_Bumble

The rates you have been offered are not bad considering your LTV, look around at the rates offered for 90% LTV.

Staying on the SVR is ok if you can afford the repayments when/if they come back up, ask for the historical information on what the SVR has been over the past few years and see how high it has been. as once the SVR goes up they may not offer such competitive fixed rates for such high LTV then? It is all a gamble and depends on what you can afford really.

In relation to whether the 1.5 years or 2 years is better, which do you feel gives more security? Do you feel that house prices will have stabilised enough in 1.5 years time to be able to remortgage away etc, will you be in a better position in 1.5 or 2 years time.

Queen

Mrs Bumble, I am too in the same position with A&L on 1.49% thinking of fixing but really wanted 5 yr fixed I too work for a mortgage advisor and really do not know what to do, our mortgage is in negative equity, and we recently went bankrupt due to hubby's long term illness property is protected we have done all the necessary to make sure of that, hubby now back at work and our income has recently been assessed for an IPA which we will start paying £150 per month when the rate goes up this will reduce to put towards mortgage in two minds to fix now at 5.99% or wait for bank base rate would need to go up excessively to match the 5.99% do I take the chance and see what happens just wanted another advisors thought on this

Mrs_Bumble

Queen I am sorry to hear of the problems you have had.

Have you asked if A&L are prepared to offer a 5 year deal at all?

If you have only recently gone bankrupt then you are unlikely to be able to remortgage away from A&L any time soon.

Are you on some sort of tracker at the moment then 1.49% above?
Are they aware of the bankruptcy and happy for you to change deals?
The bank base rate dropped excessively very quickly?

My feeling is the same as I put in the post above it really is about security isn't it, and that is different for everyone. If you have the income to cover any increases in BBR then that is not so much of a worry, however if you do not have the income to go with the increases then a fixed rate now at least gives you peace of mind and allows for budgetting purposes?

The hanging on to the tracker is a gamble because whilst A&L are offering the deal for those in negative equity will they offer as reasonable deal later on down the road when they are maybe not so keen to lend? I don't know the answer to this one, as you know working for a mortgage adviser the lending market is ever changing at the moment and they are a rule unto themselves.

So really Queen it is down to whether you are more comfortable with knowing exactly what you are spending each month without the worry of rate increase or you feel confident that you could cover any increases.

What did the mortgage adviser you work with recommend, as I am guessing he knows you quite well?