Help!!

lyndareid

Can anyone help me? I'm really confused with so much information, can anyone help me to cut through it?
My partner and I took out my first mortgage two years ago(just before the downturn) for an new build flat which was for sale for £134,000, but negotiated down to £125,000, borrowing £118,000 from Abbey at a rate of 6.24% fixed rate for two years over 25yr term. The high rate was due to me being a trainee and was classed as temporary working.
I'm now fully qualified and working in a with Local Authority and am now looking for a better rate. Abbey, now Santander, say that their best rates are only for new customers and can only offer me the standard variable rate of 4.24%. The girl on the phone talked about loan to value (they're still selling flats on my estate for £125,000!) and also 'relationship with the bank! I have never missed a mortgage payment, have excellent credit rating, I have a current account and Savings account with A&L, part of Santander, so I think my 'relationship' is good.
I don't want to pay a high arrangement fee or extend the term of the mortgage. Just really want to save money!
thanks

slummymummyof3

Swap to another lender who is also looking to look after their new customers more favourably.

opinions4u

If you owe around 90% of value I doubt you'll find another lender who wants you. Take a look at sites like www.moneyfacts.co.uk to see what is (or probably isn't) available to you elsewhere.

If you could find one, I'd expect their rate to be higher than 4.24%.

Assuming you can't move elsewhere, take the opportunity to overpay your mortgage while rates are relatively low. Get the debt down, keep your fingers crossed that property prices rise a little and then when you loan to value is below 85% start looking in to remortgaging again.

_Andy_

I think you'd struggle for a lender to value a 2yr old new build flat at or above what you bought it for.
Thus your only option given the LTV would be to stick with your current lender.

dimbo61

You were paying 6.24% on a fixed rate for the last 2 years and have now dropped to 4.24%.
Your mortgage balance should be about £113,817 and your mortgage payment should drop from £777.68 a month to £646.31.
If stuck with your existing lender overpay as much as you can afford each month and try to reduce your debt and at the same time increase your equity!
GOOD LUCK

lyndareid

Thank you for your replies.
I should have said that I paid £7000 deposit when I bought the flat so I thought I would have reduced the amount of debt at least slightly. Dimbo, could you tell me if this makes a difference to your previous reply?

bacard1

lyndareid wrote: »

Thank you for your replies.
I should have said that I paid £7000 deposit when I bought the flat

You did say that in your first post, price 125k and mortgage 118k so 7k deposit. So i doubt it will alter anything.

Also if the above is right (which i don't doubt) and you now owe 113k you have a loan to value of around 90% which is what most lenders need nowdays. Do you have any more money you can put in to make the deposit bigger? Or you may struggle to get a better deal anyway

lyndareid

This may sound like a crazy idea, but my parents are also looking for a good mortgage deal. They owe £69,000 on a house valued at £160,000. My mum wondered of there was any way to use some of the LTV invested in their house to help me! Any thoughts, or is this a minefield?

getmore4less

lyndareid wrote: »

This may sound like a crazy idea, but my parents are also looking for a good mortgage deal. They owe £69,000 on a house valued at £160,000. My mum wondered of there was any way to use some of the LTV invested in their house to help me! Any thoughts, or is this a minefield?

Easy they borrow more money and gift it to you.

dimbo61

I worked out the figures on £118,000 over the 2 years at 6.24%.
Now if the " bank of mum and dad " were to loan you say £8,000 interest free over 5 years you could then get a 5 year fix with say ( YBS) at 5.59% Fee £995 and LTV of 85%.
This is all ifs and buts and maybe because we dont know your long term plans and if staying in the flat with your OH and do you plan on having a family ?
Can "mum and dad " afford to loan you the money ( or gift it to you!).
Like I said OP every penny you can afford and see whet your existing lender can offer GOOD LUCK

joolley

OP, have you, in your investigations, found many rates better than 4.24 for 90% LTV? Or if the parents loan you money, it'd have to be a fair whack to get below 85% ltv.

4.24 is a good rate. Overpay like mad if allowed and reduce your ltv, keep an eye out for what's going on with interest rates and move rates/lenders once in a better position. When in a better ltv position, the parent's gift will have more effect.

joolley