Fixed rate ending, LTV 100% options?

mettlemickey

Hi,

Not sure I have too many options but hopefully someone on here knows better....

I have 119,000 interest only mortgage with NRAM. The value of my house has gone down to about 119,00 (based on Nationwide index), so even though i had some equity in the house when i bought it, there is none now and im stuck at around 100% LTV.

My fixed rate ends in June and id like to re-fix it in expectation of rates rising this year, id also like to get onto a repayment deal, but NRAM say they have nothing for me without at least 15% deposit.

I have no capital to put in at the moment and im guessing most other lenders will have a similar view to NRAM, but would really appreciate any advice from MSE experts out there.

getmore4less

Overpay is probably your only option.

Bullfighter

Sadly, unless the NRAM valuer puts a higher value on it, you will have little choice other than to move onto their SVR product.

What repayment vehicle do you have in place (savings/endowment)?

beecher2

You're stuck on the follow on rate I'm afraid and would need to come up with at least £12k plus fees in order to remortgage elsewhere. You need to overpay as much as possible I'm afraid, or is selling up an option?

Burridge60

You will revert to NRAM standard variable rate once your deal ends and will stay there until you are able to move lenders or they start lending at higher Loan to Values. <Northern Rock Asset Management>

Their SVR is relatively high so it might pay you to try to reduce your borrowing by overpaying (should be penalty free on SVR). I am assuming that you have some money in your interest only savings plan taken out to repay this mortgage.

Reducing your loan to value is the key - you either overpay the mortgage, save your cash separately to use as a deposit and to pay moving costs or wait for house prices to recover (but they could go the other way).

mettlemickey

Thanks everyone for your feedback.

Regretably I have no endowment or alternative to pay this mortgage back, originally this property was a buy to let investment that i expected to sell at a profit (many years from now), however circumstances changed and for the last year its been my home. This is partly my motivation for wanting to move to a repayment scheme.

From your responses it sounds like I need to overpay what i can while trying to save a deposit. A double edge sword but times are tough i suppose! Heres hoping rates stay low and house prices go up (i wish!).

dantheman2010

You are in the same situation as me, although my LTV currently is about 85-90% but it was a house bought for buy to let and after a few years I moved into it, so it is also unfortunately on an interest only term. Any fixed repayment rate is totally unaffordabe at the moment. So I am now on the C&G SVR which is 2% above BofE, and my intention is to stick it out and repay for as long as the rates allow before it becomes unaffordable to make double payments. Hopefully by that time I would have paid a proportion of the captial off to be at a better LTV for better fixable rates in the future. Fingers crossed for me, and good luck to you.

Bullfighter

mettlemickey wrote: »

Thanks everyone for your feedback.

Regretably I have no endowment or alternative to pay this mortgage back, originally this property was a buy to let investment that i expected to sell at a profit (many years from now), however circumstances changed and for the last year its been my home. This is partly my motivation for wanting to move to a repayment scheme.

From your responses it sounds like I need to overpay what i can while trying to save a deposit. A double edge sword but times are tough i suppose! Heres hoping rates stay low and house prices go up (i wish!).

Why do you need to overpay AND save up a deposit?

mettlemickey

Maybe I dont? Which is best though, save a deposit, or over pay?

neas

*sigh*

The BTL was a business purchase and you don't seem to have a clue about any of the key featues of the business.

Equity, repayment vessels and negative equity. And most importantly the difference between a deposit and equity in a property (theres almost no difference).

If you owed 110k on your property mortgage, and had a 10k deposit.. your total debt is essentially 100k.

Its the same as having a 100k mortgage... so asking to save a deposit or repay is daft.

More importantly your mortgage on a SVR will be at 4-5%+ whereas you can't get as good an interest rate from savingt a deposit.

So in this case saving a deposit would be worse than overpaying the same amount.

Its your life and you debt, so i'd get clued up about what it means to you. Having an interest only mortgage and not repaying it is daft beyond belief.. property prices will most likely fall in the next 2 years than rise.

mettlemickey

Thanks Neas, you seem to be saying that its more efficient to overpay than save a deposit.

I have an appointment with an IFA in 2 weeks time, hopefully he can clue me up a bit!