DMP and Mortgages

Mrs_Trouble

I am sure I know the answer but thought I would ask here for clarification.

I am just about to enter into a DMP. I have a mortgage on a fixed rate until July 2011 with C&G which is at 6.19%. After the term finishes we will have 15 years left and will automatically go onto the SVR of 2% + BOE rate unless we move to another product.

I am fully expecting that by then my credit rating will be diabolical, although my Husband has no debts other than the mortgage in his name, I know he will be financially associated to me and won't have the best rating either. We are fine with this as we never want to borrow again - save for the mortgage of course.

At the moment we are intending to stick to the SVR as long as we can after July, and hope that interest rates don't fly through the roof. We also intend to keep the payment we are making now to try and pay more capital off when the interest rate goes down.

My question is if we did however attempt to move onto another mortgage product with C&G would it be subject to the same tests as remortgage application, income, credit history etc. Obviously once they look at my credit history I imagine they will laugh and turn us away anyway?

How likely is it that BOE rates will go over 4% by July? Anyone got a crystal ball??

Thank you for your help

_Andy_

As long as you arent wanting to borrow any more money, no searches/scoring will be done.

Mrs_Trouble

No, we will just want to move onto a new product with no extra money being added. Would it really be that simple then to switch? That will make me feel much better if that is the case.

Thank you

Thrugelmir

Use the reduction in mortgage payments to speed up clearance of the DMP. A lifetime mortgage rate of 2% above BOE base is something worth keeping.

Mrs_Trouble

Thank you Thurgelmir - I suppose we were just concerned that interest rates might rocket to 10% and we would be on a 12% mortgage and too late to move to a better rate. I guess we just need to keep an eye on it and if it looks like edging over 4% we need to move.

You are right though, I should keep the extra we would be saving towards the DMP.

Thank you

Thrugelmir

Mrs_Trouble wrote: »

Thank you Thurgelmir - I suppose we were just concerned that interest rates might rocket to 10% and we would be on a 12% mortgage and too late to move to a better rate. D

A switch to a better rate is only of benefit in the shorter term. As once the fixed term product period is over then you'll default onto a higher SVR rate. In the case of C&G 3.99%. So 1.49% higher than you are currently paying.