About to remortgage....

paul0evans1

We have a house in London that we think is worth around £350-£400k
It is mortgaged to the value of £173,600 (roughly) of which £160k is interest only and the remainder is 'repayment'

We have a jigsaw of endowments that are due to mature at different times. In theory, they should mature in this sequence:

10/12: £39k (may be under-performing)
9/14: £6k (again, don't know how it's performing)
11/15: £50k - on course
7/16: £4150 - ahead of schedule (all being well)
4/25: £30k - very slightly under-performing (about £1k down)
This lot totals about £129k

While they should be totalling £160k, the fact that it's all staggered gives us the chance to either find a way of paying off £31k of it at a later date perhaps?

We have to remortgage now and we want to borrow an additional £30-40k to cover a loft-conversion.

We want to keep our monthly outgoings down as well. What should we do? Any suggestions or help gratefully received?

getmore4less

Current lenders interest rate?

Term?

Income?

Make sure you borrow enough for the work and don't end up short.

Review each policy to decide if they are worth keeping(forget they are for the mortgage they are just savings schemes).

paul0evans1

Thanks for the reply. The term is a bit complicated, because - as you can see, some of the endowments mature in the next few years.



There is about £13,600 that is repayment as opposed to 'interest only' and that is due to be paid in 2025

Am I correct in assuming that - in 2012 I *could* reduce my mortgage by that £39k (high end, admittedly!) and effectively be looking for an interest only mortgage of £121,000 + the outstanding repayment mortgage?



I'm currently paying: £795.57 – 4.94% - I'm coming to the end of a 5 year tie in


YBS offer the following:

5 year fixed - 4.99% (roughly the same)

2 year fixed rate - 3.99% - £633.48 (PCM)

3 year fixed rate - 4.49% - £703.68 (PCM)


Really, the thing that I'm not very familliar with is ....


1. How should I be looking at the various endowments - are they things that are best deployed in getting my interest-only figure down or should I re-invest them when they mature in the hope of shortening my mortgage?
2. Though the endowments add up to less than £160k, surely I'm OK being a bit relaxed seeing as a lot of them mature a bit early and could be grown?
3. What's the best way of me raising £30-£40k for a loft-conversion without ending up with crippling monthly bills?


Again, any advice gratefully received!

getmore4less

Still need,
Income
Mortgage rates your current deals go onto at the end of the tie in or does it stay the same.

Are each of the IO bits on terms to fit in with the endowments or can they be extended to the the longest term 2025.


To be honest I think you have created a situation that is just too complicated for you to do the analysis required

Break it down

Do each endowment as if they were little mortgages if you are short you need to increase your payments some how.

The bench mark for investment returns is a repayment mortgage where the investment return is the mortgage rate.

The endowments are just savings schemes they may or may not be better than the returns from a repayment look at each and assess them.

If you keep them when they mature you have to decide if you can invest(with risks) the money to give a better return than paying(no risk) off the mortgage.


Lets try a different angle to simplify everything so can see if you pay the mortgage off by your target date.

What is that date? 4/2025 so 15 years looks like the current end date

How much money do you have to apply to getting the house paid off
That will be the current mortgage payment
All the endowment payments
Any extra you have to throw at this from income
The current value of each endowment if cashed in or sold.

Do a "what if"
use all the endowmwnt money to bring hte debt down
Run a calculatior for the rest using repayment over 15years
Is the monthy cash enough to clear the mortgage.


I would get all this understood before considering another £40k debt.

BankCrusher

check if its worth cashing in the £39k policy now
use that

and just overpay your mortgage £3k a year over the next 12 years

i doubt you will borrow £40k cheaper than £60 @ week max
the interest on borrowing an extra 40k would be at least 2k a year on a mortgage

dimbo61

Check your YBS mortgage deal carefully !
Some go onto the SVR ( 4.99%) and some like mine go onto a tracker at 0.75% above base ( but its got a 3% collar ! so 3.75%)
Have you considered an offset with YBS that way you put any savings into the offset account and this will help to repay the £36K you are short

dimbo61

All 3 deals you mention are best buys in the paper this week so think long term if you need security with a £210K mortgage

VIGILANT22

dimbo61 wrote: »

Check your YBS mortgage deal carefully !
Some go onto the SVR ( 4.99%)

The SVR will be 4.99% as this is a new deal and will be subject to current criteria of which 4.99% is the svr...........