First time poster - NRAM remortgage advice req'd

Sammma

Hi all

Apologies if this hasn't be covered in other areas but was just after a bit of advice re my current situation.

In a 5 year fixed 100% Northern Rock 5.99% due to expire in December but was wanting to look at my options. I contacted NRAM yesterday and was made aware that they have done away with their ERC and after December I will go onto their variable 4.79% rate which should save me over £100 a month but was hoping to act a little quicker.

The only problem would be my loan to value ratio - currently have £100k left on the mortgage and £11k on the unsecured loan part of it and I was thinking my property had probably dropped in value to around the same amount as was outstanding - £110k but an identical flat upstairs has just gone on the market for £126k - I know it probably won't sell at that but has given me hope.

So where does this leave me when looking to remortgage now? Can I say that my flat is worth £120k with £110k outstanding putting the loan to value ratio close to 90%? What checks would the lenders do? Surveyors?

I'm kind of resigned to staying with NRAM until the rate drops (although it'll probably change by then!) but if I can act sooner I can be saving money but also have the opportunity of renting a friends house (have baby and dog now so need bigger space) - would I have to tell my mortgage company if I let it out? Does this affect which type of mortgage I can have?

Any help out there would be gratefully received, I'm not asking much am I?!

Thrugelmir

A remortgage to another lender would require a valuation and a full mortgage application. At 90% LTV its unlikely that you could obtain a mortgage rate better than the 4.79% SVR available at the end of the term.

Letting a property has pitfalls. Something which should be considered carefully. Not informing your lender is a breach of your mortgage contract and invalidates landlords insurance. A prospective tenant may well ask to see evidence of approval to let the property as well.

As the ERC has been lifted. Have you considered selling up while there is still equity in the property?

Sammma

Thanks for your quick response Thrugelmir - you say a remortgage is unlikely but would it be best to make a few enquiries? Are there any lenders out there at the moment who are more likely to go for a higher LTV ratio?

I'm still wary of letting my property out but seems like the only way we would be able to get into a house right now - I hadn't thought of selling before purely because I didn't believe there would be any positive equity in it. If I could sell for a (small) profit would you see that as a better option to letting?

I wanted to stay on the ladder and continue paying off my mortgage just so it looked like I was getting somewhere but by going back to renting I suppose there is a chance that I could save money a bit easier?

Thrugelmir

Sammma wrote: »

you say a remortgage is unlikely but would it be best to make a few enquiries?

Only at a better interest rate than you are on. Not that remortgaging is impossible. As the higher the LTV the higher the rate.

Very few lenders offer mortgages over the 90% LTV threshold.