Advice on 100% mortgages!??

Martin82

I currently have a 100% mortgage, interest only on my house. I have recently come to the end of my fixed rate agreement and feel as though I am trapped with my current mortgage company, Accord Mortgages?

I do not have a deposit to put down so I am unable to look at anything less than a 100%.

I am currently on the SVR which is 6.2% which means that my payments are very high. I have been advised by Accord that this is the only option for me.

I was hoping someone out there maybe able to give me some advice on firstly whether this is correct and if not what the best route for me would be.

Kind Regards
Martin82

abouttimetoo

Hi Martin82

I'm afraid I don't have the answer but wanted to give you a bump as well suggest you also post your query on the mortgage and endowment board.

Good luck with your situation

sarahevie

A few of us are in a similar position.

We took out our mortgage in 2007 based on two incomes we now only have one as I've given up work after having kids.

Our income wouldn't meet any lenders income requirements and therefore we can't switch to another lender so when ours comes to an end (7 years we fixed for 10 years) we will possibly be stuck with the SVR.

Our solution is overpaying our mortgage to gain equity in the property so our LTV is more favourable. Borrowed 90% initially but now is probably nearer 80% if we can get it down to 60% a broker has told us more options would be available for us.

I would speak to a broker and see if they can advise of any specific products. But gaining equity would be your best bet there's more products available as it's less of a risk.

Bravepants

Hi,
Sorry to read about your troubles. Yes, the lowest mortgage rates are reserved for those with higher deposits.
Have you saught independent advice from an independent mortgage broker like London and County? They should be able to offer you free advice, and perhaps go through some options with you.
You can find them at https://www.lcplc.co.uk. No need to trust what your current mortgage provider says!

Do you have any equity in the house? If your interest only payments are so high that you are finding them a squeeze then how do you plan to pay off the capital? If I seriously thought that I would never be able to pay off the capital, and I had absolutely no equity in the house, and my interest only mortgage payments were higher than what I could expect to pay locally for renting somewhere, then I would be tempted to hand the keys to the mortgage provider and say FU! It's as though you're renting anyway! Of course this depends on how you feel about your house. But it's only bricks and mortar afterall, and if you have no plans to pay off the capital then you will end up losing it in the future anyway unless you're happy to pay interest (rent!) ad infinitum!

cake21

Hi there, I also took out a 100% mortgage and was very anxious when it came to renewal last year - although I had a repayment mortgage I was in quite a lot of negative equity! So unfortunately I agree that you might well be trapped with Accord at the moment, who aren't obliged to offer you anything else.

There may be another provider willing to take on a 100% mortgage and give you a lower rate, there is a lot of advice on remortgaging on the main site moneysavingexpert.com/mortgages/

Assuming that you can't remortgage, all is not lost. Either by overpaying your interest-only mortgage or switching to a repayment mortgage with your current provider, I would pay off as much as I could so that in a couple of years time I was in a better position to remortgage. The mortgage-overpayment-calculator can show you how even small overpayments can make a big difference. (there is another one somewhere if you search the forum for Locoblade)

If you're thinking that's all very well but where is the money going to come from, then create a statement of affairs (SOA) using the Statement of affairs calculator and post the results on the Debt Free Wannabe forum where you'll get lots of friendly advice about how to reduce your spends, therefore freeing up more money to spend on the mortgage. I'm also a big fan of the Frugal Living Challenge

Good luck! Been there done that, I know it's not fun.

Joe_Bloggs

Welcome Martin82
It sounds as if you have no money to call your own. If this is the case then you should consider your lifestyle, how your debts built up and future job prospects.

I think Accord (YBS) are correct in their judgement that nobody else will take your mortgage. Hence they can charge you 6.2%. Use this site to spend less, get more for what you spend and reduce your debts so you can eventually afford to pay off some of the mortgage capital.

If your property is worth less than your mortgage then all the greater the incentive to turn your finances around.

J_B.
Edit Well Said Cake21