Re-Mortgage or other method? HELP!!

peterg1965

I have also remortgaged but the term of my 'additional borrowing' was just 10 years, that makes an enormous difference to the amount of interest you pay. If you are going to re-mortgage (decision is yours despite advice on here) then the key is to be financially very disciplined. Consider two things:
- if you proceed with the remorgage over 21 years use the 'saved' £500 to make regular overpayments (that is the discipline bit). If it is a SVR mortgage with Nationwide I think you can make unlimited overpaments. This reduces the amount of Interest paid and the term of the loan.
- Consider a much shorter term, ask the Nationwide to quote you on a 15/10 or 5 year term and look at the huge reduction in interest paid. You should be able to use their mortgage calculator on the Nationwide Website.

As a matter of interest what is the APR for the Carcraft loan and what is the term?

Hope this helps.

kenshaz

tomstickland wrote:

"releasing equity" is a positive sounding phrase that actually means "borrowing more money".

Releasing Equity-- deliverance or liberation from a restriction,duty or difficulty the net value of a mortgaged property after the deduction of charges.

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no mention of borrowing more money:huh:

Californication

But the equity in the asset (ie, the house) is released by secured borrowing against the value of the asset. You then have interest on the secured debt (mortgage). The only way to really release the equity would be to sell the asset.

A

Pike

Hi all,

I can't thank you enough for all of your advice!

My wife and I can afford the new increase to our mortgage with reasonable comfort. With the additional 24k advance, our mortgage will go from 985.00 per month to 1156.00. When our current 2-year fixed rate at 4.44% expires in 18 months, we intend to move lender and find another competetive 2-year fixed rate else where. I guess its a bit of a gamble but we're hoping that when the time comes, we can get the 'soon to be' current payment of 1156.00 down with another lender. We are currently paying an addional 700.00 per month for car and credit card but with the new mortgage will will get that down to 171.00 - quite a saving. I know what you're all saying about the loan being secured on your home but we really can't think of a better option. We have tried the un-secured loan route but found that you can only borrow to a maximum of 7-years, and the repayments would mean that we wouldn't be any better off on a monthly basis. I guess you can say that we are only thinking short-term, but the fact is that we can't afford the extra 700.00 going out every month! We pay 450.00 (HP) for our car, and as soon as we pay it off with this extra borrowing, we intend to sell it and get something a bit more practical, and cheaper! We also intend to put our credit cards in the safe, never to be used again!

Peterg1965, many thanks for your comments. We have been home-owners for 4-years now, with 21 years remaining. We could have easily gone back to 25 years on this loan, as no doubt it would have taken the monthly repayments down further, but that would be defeating the object wouldn't it? When we re-mortgage again in 18 months (hoping for another good 2-year fixed rate deal), we will apply for 20 years, thus getting the number of years of repayment down again. This is the right thing to do isn't it? I apologise for sound so dum!

tyllwyd

Pike wrote:

When our current 2-year fixed rate at 4.44% expires in 18 months, we intend to move lender and find another competetive 2-year fixed rate else where. I guess its a bit of a gamble but we're hoping that when the time comes, we can get the 'soon to be' current payment of 1156.00 down with another lender.

The one thing that jumped into my mind is that of course interest rates went up recently, and most experts seem to be predicting that they will go up again before Christmas - it depends on how the market goes over the next 18 months, of course, but you can't rely on the payments coming down, so you should have plans in case things don't go your way.