Mortgage deal coming to an end, what next?

Harris_McP

Hi Everyone,

been loitering in the shadows for some time, and have been benefitting from some excellent advice from the website regarding managing money and budgeting, and debt (currently £7200 on credit cards, but have managed to pay off £2500 in 8 months) .

I have decided to join in the fray, as I would appreciate some advice regarding my mortgage deal which is due to end in December.

I have an outstanding balance of £108000 (£120000 at start of mortgage) on a property valued in Autumn 2007 at £140000. We have been on a 0.25% above base rate tracker for the last three years. In December this will revert to the lenders (HBOS) SVR, 3.5%, an increase of c£150 / month (this will reduce the rte at which I can pay off our credit card debts).

Should I sit on this rate for now, or look to remortgage. My current LTV is 78%, but if I do remortgage with another lender I assume a new valuation will be required, and considering the way house prices have been I expect it will increase my LTV, and therefore increase cost of the mortgage.

As it would appear that the base rate is not going to be shooting up over the next year or so, I was hoping to find a 2 year tracker at a lower interest rate than the 3.5%, but with my LTV this doesn't look likely.
So I am of the opinion that I should leave things as they stand, and in a year or so (in theory when my LTV would have decreased) have another look around. Does that make sense?
Or should I look to remortgage to £115000 to pay off the cc debt?

Thanks in advance for all your wise words!!

opinions4u

Harris_McP wrote: »

Should I sit on this rate for now, or look to remortgage.

There is no harm in shopping round. Take a look at www.moneyfacts.co.uk/mortgages to see what the better rates look like. I'd also ask Halifax what rates other than their SVR they have for existing customers.

My current LTV is 78%

It may be a higher LTV. Your property may have fallen in value since then.

So I am of the opinion that I should leave things as they stand, and in a year or so (in theory when my LTV would have decreased) have another look around. Does that make sense?

After looking around, doing nothing may be the best course of action. But one outcome could be that the property value falls faster than your debt ... worsening your LTV.

Or should I look to remortgage to £115000 to pay off the cc debt?

I wouldn't.

Harris_McP

Thanks opinions4u.

Halifax offer the following for 75 - 90% LTV on a fixed rate
2 years 4.59%
3 years 5.29%, no fees
5 years 5.49%, no fees

They don't do trackers above 75% LTV.

I've done a quick search of other lenders basing this on a 90% LTV, anticipating a 20% drop in house value since 2007, and there is nothing better than the SVR that I'll be on from next month. Would it be sensible to commission a valuation myself, so I know the full picture. Would a lender except a privately commissioned valuation, thereby reducing any fees, or would they still need to do a valuation themselves?

Overall, it looks like I'll stay on the current deal for now, and maybe transfer some of the payments from the cc debt over to the mortgage as additional payments in an effort to keep pace with house devaluation. Although that means the cc debt will take longer to clear, its all on 0% at the moment so not a big problem.

thanks