They said no to a new fixed mortgage :(

stuartworley

Hi

I have been with A&L for nearly 5 years, and have never missed a payment.

However now they say they cant offer me another fixed mortgage because the value of our house has dropped so dramitcally we are outside thre 10% LTV mortgage

PS, they reckon our house price has dropped £25,000 from £177,000 to £152,000 which when I went to another website Zoopla it does say its now worth £158,000

So now all they can do is offer there varible rate of 4.99% but obvisouly this can change quite a bit, so me and my partner are worried that we will never get on a fixed rate for years.

Does anyone have any ideas, or is this just the way things are?

Thanks in advance
Stu :eek:

mambo69

You dont say how much your mortgage is for so we dont know the mortgage % being outstanding

chirpchirp

This is what I would do:

1. Contact a local estate agent and have the house valued as though you are moving - this shouldn't cost anything but you might get a few follow on calls asking if you are still considering moving. This will give you peace of mind as to how much your house is roughly worth. Ask estate agent how much they would recommend for a quick sale and this will be more in line with your mortgage lenders amount.

2. Once you know the above, if you think the amount is borderline try contacting a different lender - remember you don't have to stay with the same lender just because you have been with them for a number of years. I hear the post office are offering a good fixed deal.

Hope the above helps.

madeupname1

stuartworley wrote: »

Hi

I have been with A&L for nearly 5 years, and have never missed a payment.

However now they say they cant offer me another fixed mortgage because the value of our house has dropped so dramitcally we are outside thre 10% LTV mortgage

PS, they reckon our house price has dropped £25,000 from £177,000 to £152,000 which when I went to another website Zoopla it does say its now worth £158,000

So now all they can do is offer there varible rate of 4.99% but obvisouly this can change quite a bit, so me and my partner are worried that we will never get on a fixed rate for years.

Does anyone have any ideas, or is this just the way things are?

Thanks in advance
Stu :eek:

You don't mention what the fixed rate would be and what the standard variable rate is. In my case, the SVR was lower than the fixed rate being offered, so I am using the opportunity to pay the amount I am saving in interest as overpayments on the principal each month. In my case its a considerable amount of money. I am hoping that by making these overpayments, I will over time improve the LTV and therefore be able to secure a more competitive mortgage in the future.

stuartworley

Brought Property for: £177000
Rate: 7.24%
ends: Sept 1st 2010
never missed a payment

---

Looking to secure a fixed rate mortgage now from the same company A&L

They say cant offer me anything as its now
Mortgage left to pay: £167,000
Proprty Value: £152000
Only offering Base Rate: 4.99%
(4.99% is great compared to now it just that we like a fixed rate just in case the base rate goes crazy, as its seems obvious that the base rate can only go up)

The sad thing is they say we dont own 10% of the property to offer us a fixed rate, but they did last time which makes no sense.

VIGILANT22

Mortgage left to pay: £167,000
Property Value: £152000

Are you aware house prices have dropped and for some people this has meant they have negative equity. Negative Equity means the mortgage is more than the value of the house, which with the figures you have posted appears to be the case.

getmore4less

If you were happy(comfortable) with the 7.24% then you have a base rate rise of 2.25%(if SVR tracks) before you are at risk


Carry on paying as if you had a 7.24% rate and you will overpay a fair amount.

£167k over 20years @ 4.99% £1100pm and 7.24% £1320

stuartworley

Thankyou for all of your advise

Yes, it appears we are in negitive equity, its was just such a shock of how much and heart breaking but I guess we are not the only ones.

We are going to keep paying the same amount as we do now to hopefully pull us as much out of trouble as possible

fingers crossed the base rate wont go up to much and fingers crossed our house property will rise

Thanks again everyone:beer:

mjm3346

With the current valuation you would be looking for a new company to give you a 110% mortgage, [STRIKE]just about[/STRIKE] impossible and A&L would not have you either unless you were an existing customer.
As suggested above you could use all the "saving" you will make on the SVR to overpay (around £3,700/year) so reducing the mortgage balance faster and chucking any spare cash at it would help as well.
You need a valuation of almost £186,000 to get a 90% mortgage with your current outstanding balance, that is not going to happen at the moment (unless you have made some amazing home improvements).
If there is a 2% a year increase in your property value and you make overpayments at the current SVR you would get out of negative equity within 2 years.
When rates are going to go up is guess work, the worst rate A&L offer for a 4 year fix is 5.84% so their guess is they will make money out of that rate over the term.