Fixed rate deal ended, help needed to get new deal.

hackettpso

My mother has a part repayment 60% and part interest only 40% mortgage which had a fixed rate that has just finished AUG 09.

Mortgage - £152,000
Value - £225,000
Monthly repayment - £900

I have always rented so am virtually of no use to her in terms of advice.

Basically she is looking to change current mortgage and reduce her monthly payment to take advantage of the current interest rates.

Her lender has stated they can offer her a new deal but monthly repayments would still be around £820 PM

Could anyone post either some advice in laymens terms or post a link to a good source of information that i can try to digest to help her out.

Many thanks.

Mrs_Bumble

I think it would probably be beneficial for your mum and you if she spoke to a good independent, whole of mortgage broker as there are lots of things that are going to have to factor into the mortgage decision.
a) there needs to be substantial income to cover that mortgage
b) What is the current term of the mortgage does that take your mum past retirement age
c) how is the interest only part of the mortgage going to be repaid in the long term?

Have you checked the current value on a site like https://www.zoopla.co.uk as if the valuation is based on what other similiar properties are up for sale at, this is not a true reflection of the valuation.

Reducing her monthly payments and making use of the current interest rates are two entirely different things as any decision on a new mortgage is going to have to be based on how stable the household income is and whether the income could support interest rate rises.

Although the bank of england base rate is very low, she isn't going to be able to borrow money at this rate and product she takes is going to be tracking the base rate at substantially above this or a fixed rate probably similiar to what she has had previously judging by the new monthly payment that you have quoted, so she does need to understand this.

Get some recommendations for a good local independent, whole of market, mortgage broker they will be able to help you through the whole process.