2year fixed interest rate coming to end

keighley_jo08

Hi,

I wondered if anyone could help. I'm not all that clued up on this mortgage lark (altho I have one!)

We purchased our property jan 08 on a 100% mortgage, it is now obviously in negitive equity we have no savings at all.

I need help as I dont know when the deal comes to an end (jan 10) when we look for another deal will be need a deposit to change deals? or will be have to stay with our current mortgage lender (c&g - now Lloyds).

Any help would be great - Thank you

Keighley

beecher

You'll have to stay with your present lender unless you can get your Loan to Value down to 90%. Since you have no savings then that doesn't seem likely. You may find the SVR is lower than your present rate, but interest rates will increase at some point. I'd advise going onto the Debt Free Wannabee forums for help - you can post a Statement of Affairs and get help with cutting household bills in order to be able to save/overpay to get out of negative equity and into a position where you can remortgage.

opinions4u

keighley_jo08 wrote: »

We purchased our property jan 08 on a 100% mortgage, it is now obviously in negitive equity we have no savings at all.

You bought at or around the peak. In the 1990s it took the best part of a decade for house prices to recover to their peak. In other words, you would be wise to consider what action is appropriate to get yourself out of negative equity (e.g. overpaying the mortgage, building up a savings pot etc).

I need help as I dont know when the deal comes to an end (jan 10) when we look for another deal will be need a deposit to change deals?

I believe you will need your mortgage debt to be 90% of your house value or less. If your house is worth 20% less than you paid for it you will need somewhere around 30% of its current value to be able to buy your way in to a remortgage with a new lender.

The only alternative will be what C&G/Lloyds offer you.

or will be have to stay with our current mortgage lender (c&g - now Lloyds).

Their SVR appears to be a BofE base rate tracker at a 2% margin. In other words, just about the best rate you could possibly go on to in today's market.

Things might have changed come January, and you should keep an eye on the situation, but at the moment I'd suggest checking what overpayments your mortgage allows you to make without penalty and working out a budget to start chipping away at the debt.

keighley_jo09

Spoke to our M/L this morning as I was worried when our term comes to an end.

Once it has finished we will go straight on to the SVR (2.5% at the moment) if things stay how they are and this stays at 2.5% our repayments will be £484 (based on our current balance) but by then it could be lower!

Put a HUGE smile on my face!:T

beecher

Just remember that interest rates will go up so make sure you're prepared for when they do.