Mortgage help please

TJH_2

Hi all, just some general advice please. Our current mortgage is with Abbey (over 126K)
It is fixed til feb and will automaticly go to their varible rate of 4.24 unless I arrange a new mortgage.

My problem is over the past few years we have become in debt,we are working with cccs and offering token payments etc. obviously my credit rating is now shot.

Never missed mortgage payment.

My question is do I still have power to arrange a better deal with Abbey or should I just let it slip onto the varible-at the moment we stand to be £100 per month better off we we did that.

Frankly I dont have a clue what to do or where I stand, any advice would be most welcome.

Thank you

herbiesjp

Staying with Abbey will be the only way of keeping a competitive rate, due to the adverse credit history.

So as long as you just want a new rate (no increased lending) Abbey will tell you what rate you will be eligible for based on your LTV.

They will not underwrite your application, it is treated as a product switch.

TJH_2

Thanks for your quick reply, sorry what is LTV?

herbiesjp

LTV = Loan To Value

Loan to value is the mortgage amount expressed as a percantage against the property value:

EG:

mortgage of £50k against £200k property = 25% LTV
mortgage of £126k against £200k property = 63% LTV

Lenders offer different interest rates at different tiers of LTV

TJH_2

Thanks again.

powerwin

TJH wrote: »

My question is do I still have power to arrange a better deal with Abbey or should I just let it slip onto the varible-at the moment we stand to be £100 per month better off we we did that.

I'm not an expert, so maybe someone here more knowledgeable than me could answer this:

What is the normal procedure with Abbey when you come off a fixed interest rate period in terms of the continuance of your mortgage with Abbey? Does Abbey let you choose a new deal with them, or do you have to accept the Abbey SVR?

Like you say, in the short term, with interest rates currently being low, the Abbey SVR is likely to be cheaper for monthly payments than a fixed rate deal. If you were to go onto the SVR, short term you might be ok, but you'd have to prepare yourself in case of an interest rate rise, which is probably quite likely.

Rgds

rfsp

hi
i would say you should be going for a fixed deal...as interest rates will increase within few months and at that time you will not have a better deal if you continue on SVR...

Now its not too late to Fix!

PS:Recently some banks and building societies have increased their fixed rate by anticipating interest rate increase

TJH_2

Hi all, been on to Abbey and have they offered 2 yr fixed rate at 3.99% which I am quite pleased with, If I am being honest I think I am a bit nervous that Abbey might do a credit check and decline the offer once they see my poor credit rating.