Deposit needed to Sell & Buy or Stay Put?

stephena_2

We have a house valued at £160000 which we owe £143000 on the mortgage was with Northern Rock and is now with NRAM... good news is no early repayment charge (Expires 07/11).

What I cant work out is the following if we wanted to re-mortgage our home to take advantage of an improved offer (currently paying 5.59%) why cant we have 100%?... it seems like to move my deal to another lender I have to come up with a 10% minimum deposit is this right?

We have looked at moving home around the £190000 mark but again 10% deposit is required and funnily enough I don't have £19000 lying around the house.

I cant be on my own here so what is the best course of action move or stay put? It seems like I cannot afford to do either!?!

I am naturally very concerned about this. Any advise would be gratefully received.

davilown

stephena wrote: »

We have a house valued at £160000 which we owe £143000 on the mortgage was with Northern Rock and is now with NRAM... good news is no early repayment charge (Expires 07/11).

What I cant work out is the following if we wanted to re-mortgage our home to take advantage of an improved offer (currently paying 5.59%) why cant we have 100%?... it seems like to move my deal to another lender I have to come up with a 10% minimum deposit is this right?

We have looked at moving home around the £190000 mark but again 10% deposit is required and funnily enough I don't have £19000 lying around the house.

I cant be on my own here so what is the best course of action move or stay put? It seems like I cannot afford to do either!?!

I am naturally very concerned about this. Any advise would be gratefully received.

If you sell your house for the quoted amount (perhaps unlikely in this present climate), you'll have £17,000 cash. Take away fees etc, you'll be left with £14,000 maybe.

You need £19,000 as 10% deposit, plus £1,900 for stamp duty (1% I may be wrong here), fees etc around £3,000 maybe.

Really you'll need at least £23,000 so at the moment, I'd stay put until you have at least that extra saved in the bank.

Ref 100% mortgages, the're not about full stop. whether it's a permenant thing (which I hope) or temporary is anyones guess.

stephena_2

I guess the bit I'm struggling to come to terms with is the fact i need a deposit to stay in my own home... I suppose this is the negative impact of being with Northern Rock

huzzer84

You don't need a deposit to stay in your own home, you could carry on at 5.59%. You want to re-mortgage to pay a lower rate. Any lender will want to be taking on a lower risk if they are charging a lower rate, that was still the case before the financial crisis began, a 100% mortgage was still more expensive. The only difference now is that 100% mortgages are considered just too risky (a lender will factor in about a 25% loss if it has to be repossessed after all costs and the quick sale value) and so you won't get another 100% mortgage, but NRAM can't cancel your existing deal unless you give them a reason to by defaulting.

Nothing to do with being with Northern Rock right now, more to do with taking on a 100% mortgage in the first place.