GE Mortgage confusion and advice?

nicsonian

Hi

I currently have a mortgage with GE Money. There's a £125k outstanding and I've just had my property valued at £130k, which is almost 25% less than what it was valued at in 2005.

I have been paying 'interest only' for the last couple of years.

Having lost my job at the end of 2008, I switched to interest only in order to keep my property. However, I have been working for the last 18 months. But, during my period of unemployment I developed bad credit, due to making arranged payments with creditors. Since being back in work I have made good with my creditors and am now at a point of feeling financially ready to start making the most of my money.

I rang GE this morning to ask about rates and deals available and was told they couldn't help me and that I should contact an independent whole market broker? I'm looking at the lack of equity in my property, my own small but evident history of bad credit and thinking that a broker will surely cost me a lot in fees and probably only find me a deal with a high rate of interest??

I have also been toying with the idea of renting my property out. Under my current deal it does not permit for letting. Which again means that if I try and switch to a new deal there could be considerable fees to both mortgage provider and broker. What are the implications of letting a property without permission from your lender?

My fear is that house prices will continue to drop in 2011 and what insignificant equity I have will disappear. Taking on a new mortgage deal could cost a couple of thousand, which only further accelerates the threat of negative equity. However, I know that my current arrangement isn't paying anything off the debt.

Sorry for a long post, but if anyone has any helpful advice or can provide me with details of where I can get some good advice, it would be really appreciated??

Thanks
Ian

BadgerFace_2

You could almost certainly ask your lender to move back to repayment, then try to put as much money as you can towards increasing your equity. Your LTV looks to be above 95%, so I don't think you're going to find a new mortgage deal to be honest.