95% hsbc homestart mortgage ending!!

jason_b_3

Hi

Please can some one give me some advise?

Me and my wife moved into our house aug 08 and as 1st time buyers took out a 95% home start mortgage (intrest only) with hsbc.

The house was on the market at £110,000 and we paid £102,000
so we have £96500 outstanding.

We pay 565 at the min and when i checked my paper work it says 36 payments of that followed by 2 payments of £720 then we would drop onto variable standard rate of at the time 6.55% and pay £660.

I have a few questions

1 Why the 2 payments of £720?

2 when we look at a new mortgage will they use the value we paid or the value it was on the market 4? ( cause we screwed with ltv )

3 should we just go ont to standard variable rate? and anyone know what it is?

thanks in advance

:beer:

JQ.

I can only answer 1 of your questions : If you apply for a new mortgage they will base the LTV on the value of the property TODAY - they will get a valuation of the property to assess this, either via an inspection or a desktop valuation. If the value of the property has dropped since you bought it, you may have issues getting an alternative mortgage.

jason_b_3

thanks for the reply,

so does that mean we would have to drop onto standard variable rate or would hsbc offer us something?

i no we cant move providers but would of thought hsbc could offer something?

shortchanged_2

The other question is do you have a repayment vehicle in place for your interest only mortgage?

DannyboyMidlands

You really need to contact them and find out what SVR you're gonna drop on to. Can't really make any decisions until then.

It's very unlikely that they'll offer you another interest only deal with such a high LTV.

Have you saved any money to pay off the capital?

dimbo61

Read the paperwork or ring your lender and ask what does our mortgage revert to at the end of the fix?
The SVR was much higher in 2008 so you may pay less but as shortchanged has asked have you got a repayment vehicle in place?

jason_b_3

shortchanged wrote: »

The other question is do you have a repayment vehicle in place for your interest only mortgage?

sorry not sure what u mean?:(

DannyboyMidlands

jason_b wrote: »

sorry not sure what u mean?:(

Your mortgage is interest only, meaning that you are not paying off the debt. How do you intend to pay back the 90 odd grand that you borrowed? Do you have a regular savings plan for example?

shortchanged_2

jason_b wrote: »

sorry not sure what u mean?:(

How do you expect to pay off the capital of your mortgage at the end of the term. You do realise you will still have the £90K odd debt at the end of the mortgage that the bank will want repaying?

jason_b_3

o i get u now!!

it was only a home start thing so its only 3 years intrest only then it goes to capital

beecher2

jason_b wrote: »

o i get u now!!

it was only a home start thing so its only 3 years intrest only then it goes to capital

Maybe the 2 payments at £720 are repayment rather than interest only? Could be your fixed rate is for 3 years 2 months, while you're interest only for 3 years? You'd need to do the sums to see.