Question about Interest Only

Completely_Confused_2

My mortgage adviser has phoned and said that we are almost there with another mortgage lender.

The mortgage packager has done a credit search and we have passed. That's great news!

The lender they have found has an underwriter based in the office of the packager so she will be looking at our application based on affordability and we should know within 24 hours.

However, he has given us the costs for the mortgage as follows:

An interest-only mortgage (we're borrowing 218,850 approx) for 2 years at £1249 per month. Then he says we can easily switch to a repayment mortgage from the high street and knock a considerable amount off.

My question though is why we haven't been able to get a repayment mortgage? Has he found us some sort of adverse credit mortgage or something? OH has a CCJ from 2001 and a defaulted payment from 2004.

The above mortgage has no MIP and free valuation.

Many thanks, CC

HelpWhereIcan

You have not failed to qualify for a repayment mortgage. I would suspect that he is trying to sweeten the pill a little by hiding the fact that the interest rate is in the region of 5.7% behind an interest only payment.

Check very carefully what he means by:

he says we can easily switch to a repayment mortgage from the high street and knock a considerable amount off.

and what sort of time frame he is talking about.

Based on your previous posts, I would say that now may be the time to get someone else to take a look for you, just to make sure. One satisfied CCJ and one default are not enough to automatically take you off the 'high street' in some cases. How much were they for and when were they paid off?

MM has already mentioned Accord and Chelsea to you - although the problem with them may be that (depending on your deposit) they may not lend you enough. Both charge a MIP , so this may also make the difference in actual cost lower.

Has he told you the name of lender? The rate sounds 'near prime' ish, so it may not be too bad when you take into account any MIP that a prime lender that would accept you would charge.


Hope this helps